World Markets

Latam currencies mixed; Brazil stocks end 2018 on high note


By Agamoni Ghosh

Dec 28 () - Latin American currencies were mixed against the dollar on Friday but were on track to post weekly gains as regional stocks rose in line with emerging markets worldwide, and indexes such as Brazil's Bovespa capped 2018 with a strong finish.

The greenback dippedas U.S. stocks ended a dramatic week capped by large price swings, helping to boost the Japanese yen and currencies such as the Argentinean and Chilean pesos,. But Brazil's real slipped 0.2 percent.

Most stock indexes in the region had their final trading day of 2018, with Brazil's Bovespa rising over 2 percent in a broad-based rally and emerging as one of the top performing indexes this year, up almost 15 percent.

Index heavyweights, state-controlled oil firm Petrobras and iron ore miner Vale were up 47 and 32 percent respectively this year.

Investors will be eyeing President-elect Jair Bolsonaro's swearing-in next week which has been clouded by a lingering financial scandal involving his son, but markets have so far welcomed his policy pledges that could transform his country.

"The market's expectation for the Bolsonaro government remains positive," said UBS Brazil's chief economist and former Central Bank Director Tony Volpon.

Argentina's stock markets clocked gains in the year's final session to end 2018 marginally higher, but its currency had the worst year on record as Latin America's third-largest economy plunged into financial crisis.

A bailout by the International Monetary Fund (IMF) has managed to restore some market confidence in Argentina after investors pulled money out of the nation, leaving the government and companies that hold debt in dollars in turmoil.

"Argentina seems to have found temporary relief. ... FX is stabilized with a contractionary monetary and fiscal policy, and we do not expect FX reserve losses from intervention," said Citi analysts in a 2019 outlook report.

The Chilean stock market gained for the day but ended the year with a 8.3 percent decline, its biggest in five years, pressured by shares of lithium producer SQM and LATAM Airlines, and fears about global economic growth.

The Chilean peso weakened 11.4 percent against the dollar in 2018 as the price of copper, the country's main export, fell.

Mexico's IPC index closed marginally higher on the day while its currency hovered around 7-week highs.

Key Latin American stock indexes and currencies at 2120 GMT

Stock indexes Latest daily % change YTD % change
MSCI Emerging Markets 962.63 1.08 -16.9
MSCI LatAm 2569.28 2.63 -9.15
Brazil Bovespa 87887.26 2.84 15.03
Mexico IPC 41518.45 0.24 -15.88
Chile IPSA 5105.43 0.69 -8.32
Argentina MerVal 30292.55 2.62 0.75
Colombia IGBC 11144.08 -0.36 -1.99
Currencies Latest daily % change YTD % change
Brazil real 3.8784 -0.09 -14.57
Mexico peso 19.6631 0.02 0.18
Chile peso 693.7 0.40 -11.40
Colombia peso 3245 0.86 -8.10
Peru sol 3.372 -0.06 -4.00
Argentina peso (interbank) 37.6500 1.86 -50.60

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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