EMERGING MARKETS-Latam stocks rise, Argentine peso attempts recovery
By Agamoni Ghosh
Aug 16 (Reuters) - Latin American stocks rose on Friday with a global rebound in equities, as expectations of further stimulus by central banks offset worries of sluggish economic growth, while Argentina's peso was set to record its worst week in over 3 years.
MSCI's index of Latin American stocks .MILA00000PUS rose 0.8% led by gains on Brazil's Bovespa .BVSP.
The index was still on track to lose close to 6% through a chaotic week as mounting worries of a global recession sparked in part by the long-drawn U.S.-China trade war, kept investors on the edge.
The Argentine peso ARS= rose 1.8%, attempted a mild rebound from a near-twenty percent fall this week which came on the back of a surprise defeat for sitting President Mauricio Macri in the presidential primaries on Sunday.
To lift battered market sentiment, Macri announced an end to sales taxes on basic food products until the end of the year, while central bank barred private banks from having total dollar holdings exceeding 5 percent from Aug 20 onwards.
Mexico's peso MXN= was marginally higher a day after the central bank cut its key lending rate for the first time in five years citing slowing inflation and increasing slack in the economy.
"If you were to look at the pure nuts and bolts of the Mexican economy, which is low growth and inflation has come down significantly, the rate cut is long overdue," said David Rees, emerging market strategist at J. Safra Sarasin Asset Management.
"That central bank is still cautious though and as there is a lot going on in the background. So we have to see if the Fed cuts rate in September and then probably Mexico will follow."
The surprise move by Mexican policymakers follows rate cuts by central banks around the world in the last week as a trade-induced slowdown shows more signs of hindering global growth.
Chile's peso CLP= rose only marginally, while stocks .SPCLXIPSA gained 0.5%.
Key Latin American stock indexes and currencies at 1411 GMT
daily % change
MSCI Emerging Markets .MSCIEF
MSCI LatAm .MILA00000PUS
Brazil Bovespa .BVSP
Mexico IPC .MXX
Chile IPSA .SPIPSA
Argentina MerVal .MERV
Colombia IGBC .IGBC
daily % change
Brazil real BRBY
Mexico peso MXN=D2
Chile peso CLP=CL
Colombia peso COP=
Peru sol PEN=PE
Argentina peso (interbank) ARS=RASL
(Reporting by Agamoni Ghosh and Aaron Saldanha in Bengaluru Editing by Nick Zieminski)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.