By Agamoni Ghosh
Feb 26 () - Most Latin American stocks were subdued on Tuesday as trade optimism cooled and global growth fears continued to weigh on sentiment, while currencies in the region steadied against a weak dollar.
U.S. President Donald Trump cited the recently held trade talks as the reason for not raising tariffs further on Chinese goods, saying negotiators were close to a deal.
MSCI's index for stocks in Latin America fell 0.3 percent as most indices in the region slipped.
The dollar, meanwhile, sank to a three-week low boosting currencies in the region after Federal Reserve Chairman Jerome Powell suggested he was unlikely to raise interest rates anytime soon.
Powell further said despite a strong U.S. economy, growth could be at slower pace and predominant risk still lay with global growth figures especially from Europe and China.
Shares on Mexico's IPC index fell marginally dragged mainly by mining company Penoles which tumbled over 6 percent on profit miss and fiscal year 2019 warning.
A weak dollar did little to lift Mexico's peso which slipped 0.14 percent. Rating agency Moody's said it saw significant pressure on the country's sovereign credit rating even as President Andres Manuel Lopez Obrador seeks to revive state oil firm Pemex.
Pemex holds $106 billion in financial debt, the highest of any state oil company in Latin America.
"The government is still not accepting the scale of the problem facing PEMEX. The measures that we have seen so far are not going to cut it when it comes to providing support," said Christian Lawrence, senior market strategist, LatAm FX, Rabobank.
Stocks in Chile slipped further away from eight-month highs hit in the earlier session, while the peso tested its best levels since August 2018, helped by an advance in the price of copper, the country's main export.
Argentina's Merval index declined in broad-based gains led by declines in shares of steel producer Tenaris after Barclays cut their price target on the stocks.
Shares on the Bovespa bucked trend, gaining 0.4 percent led by financial and material stocks, while the Brazilian real tacked 0.1 percent.
Planemaker Embraer climbed 4.3 percent at its best after the company's shareholders approved an agreement to sell 80 percent of its commercial aircraft division to Boeing Co.
The country's Senate on Tuesday approved Roberto Campos Neto as president of the country's central bank. Neto had earlier indicated there would be no immediate change in monetary policy.
Colombia's peso firmed 0.7 percent, the most in the region, while local stocks also rose with energy firm Ecopetrol SA riding on the back of higher oil prices.
Key Latin American stock indexes and currencies at 2135 GMT
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MSCI Emerging Markets
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Argentina peso (interbank)
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