EMERGING MARKETS-Latam FX, stocks rattled by Wall Street sell-down; Brazil’s real drops

By Susan Mathew and Ambar Warrick

Sept 18 (Reuters)Brazil’s real was set for its worst day in over two months on Friday, leading losses in Latin America as a renewed technology sell-off on Wall Street prompted selling in broader risk-driven assets.

U.S. stocks turned lower in volatile trading, with regional stocks and currencies falling in tow amid continued concerns over the spread of the coronavirus, and a stalling economic recovery. .N

“The afternoon stock market selloff stemmed from concerns that the second wave of coronavirus in Europe is getting out of control and as investors grow skeptical over the outlook for Big Tech,” wrote Edward Moya, senior market analyst, New York, OANDA.

Most stocks and currencies in Latin America marked muted weekly movements, as doubts persisted over the scale of global stimulus to fish the economy from a virus-driven slump.

Latin America is the worst-hit region in the world by the pandemic. Brazil’s real BRBY led losses for the day, sinking around 2%. It BRL= was set to end the week a touch weaker.

Among stocks, a financials and energy drag weighed on Brazil’s Bovespa .BVSP, which sank more than 1.5%. Argentine stocks .MERV bounced back after two straight days of steep losses, and were set for their worst week in nearly six months.

In Argentina, the peso ARS=RASL was flat. The International Monetary Fund said it is evaluating Argentina’s federal budget proposal and enhanced foreign exchange controls as part of its discussions over a new program for the South American country to update a $57 billion agreement struck two years ago.

The Peruvian sol PEN= was set to snap a four-session winning streak as President Martin Vizcarra faces an impeachment hearing after the country’s constitutional court on Thursday rejected his appeal to delay congressional efforts to remove him from his post.

Peru’s economy is set to contract 12.7% this year due to the impact of the coronavirus pandemic, slightly worse than a previous estimate.

Elsewhere, Russia’s rouble gave up session gains on Friday after the central bank kept rates unchanged at a record low on Friday, deciding against further rate cuts as inflation accelerates and risks rise of fresh sanctions against Moscow, but said a rate cut was still possible later this year.

Chilean markets were closed for a holiday.

Key Latin American stock indexes and currencies:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1107.06

0.02

MSCI LatAm .MILA00000PUS

1952.92

-2.52

Brazil Bovespa .BVSP

98362.70

-1.73

Mexico IPC .MXX

36057.18

-0.2

Argentina MerVal .MERV

40778.07

2.458

Colombia COLCAP .COLCAP

1196.03

0.29

Currencies

Latest

Daily % change

Brazil real BRBY

5.3600

-2.43

Mexico peso MXN=D2

21.1020

-1.19

Colombia peso COP=

3728.12

-0.38

Peru sol PEN=PE

3.5227

-0.03

Argentina peso (interbank) ARS=RASL

75.3700

-0.07

(Reporting by Susan Mathew in Bengaluru; Editing by Marguerita Choy and Timothy Gardner)

(([email protected]; +91-80-6287-2704;))

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

Source Article