By Bruno Federowski
SAO PAULO, May 22 Brazil's stocks and currency
resumed their recent slump on Monday on fears a growing
political crisis could derail an ongoing reform agenda.
The benchmark Bovespa stock index fell 2.4 percent,
weighed down by a 20 percent slump in shares of JBS SA
, the world's largest meatpacker.
Lawmakers considered on Monday opening a probe into strock
and currency trades by JBS' controlling shareholder that may
have insulated their holdings from losses related to bribery
JBS and J&F Investimentos, a sprawling conglomerate led by
brothers Joesley and Wesley Batista, have admitted to paying the
bribes in a case that has sparked calls for the resignation of
Brazilian President Michel Temer.
The stock has been hammered this year by probes into alleged
corruption in Brazil's meat inspection system and into whether
state development bank BNDES improperly extended billions of
dollars in loans to the company.
The Brazilian real slipped 1.1 percent, despite
strong central bank intervention since the corruption
allegations broke out late on Wednesday.
Other Latin American markets seesawed as a rise in prices of
crude oil partly offset increased risk aversion.
MSCI's emerging market benchmark rose 0.8 percent
in its steepest daily gain in a month, but wider emerging market
currencies showed volatile trading.
The Mexican peso touched a four-week high, while
the Colombian peso slipped nearly 1 percent. Demand for emerging
market currencies suffered in recent weeks as a scandal circling
U.S. President Donald Trump cast a shadow on the implementation
of his pro-growth agenda.
Key Latin American stock indexes and currencies at 1705 GMT:
Stock indexes daily % YTD %
MSCI Emerging Markets 1003.40 0.78 15.47
MSCI LatAm 2485.51 -1.28 7.57
Brazil Bovespa 61160.01 -2.36 1.55
Mexico IPC 48826.31 -0.49 6.97
Chile IPSA 4803.86 0.21 15.72
Chile IGPA 24127.96 0.18 16.37
Argentina MerVal 21365.16 -1.15 26.29
Colombia IGBC 10734.20 0.25 5.98
Venezuela IBC 72650.23 1.43 129.14
Currencies daily % YTD %
Brazil real 3.2884 -1.06 -1.19
Mexico peso 18.6605 0.28 11.17
Chile peso 669.85 -0.14 0.13
Colombia peso 2901.5 -0.73 3.45
Peru sol 3.276 -0.31 4.21
Argentina peso (interbank) 16.1050 -0.34 -1.43
Argentina peso (parallel) 16.13 -0.12 4.28
(Reporting by Bruno Federowski; Editing by Andrew Hay)