December 5, 2018 / 9:39 PM / 9 days ago

EMERGING MARKETS-Latam stocks extend losses, dollar recovery pressures currencies

 (Recasts throughout, updates prices)
    By Susan Mathew
    Dec 5 (Reuters) - Most Latin American stocks and currencies
declined on Wednesday, extending falls from the prior day when
concerns over slowing global growth and a lack of resolution in
the China-U.S. trade war gripped investors.
    The MSCI index of Latin American shares was
0.6 percent lower in thin trade because U.S. markets were closed
in honor of the funeral of late President George H.W. Bush. A
recovering dollar kept regional currencies
pressured.
    "Today is one of those days when the market is dead. Volumes
 going through are tiny and there is not much in the way of a
clear direction," said Christian Lawrence, a senior market
strategist with Rabobank.   
    On Tuesday, regional markets tracked a fall in global
markets as declines by long-dated U.S. bond yields and a renewal
of trade concerns stoked fears of a downturn in the United
States, the world's largest economy.
    Extending the slip, Brazil's real dropped 0.4 percent
on Wednesday, while the Chilean peso slid 0.3 percent,
tracking a fall in copper prices - the country's main export.
    Bucking the trend, the Colombian peso was half a
percent higher. 
    In Mexico, the peso and stocks held steady
after trading lower for most of the session, as concerns persist
over the new government's policies.
    Mexican President Andres Manuel Lopez Obrador said he will
not cancel oil contracts awarded under the previous government's
energy reform, but he wants to see production from existing
contracts before considering new deep water auctions.

    "It's undoubtedly a negative. But more of a concern for
Mexico is the signal that it delivers," Rabobank's Lawrence
said. "The Mexican economy is heavily reliant on foreign
investment, and any sign that Mexico is not a safe place for
investment is going to discourage that.
    "It's a big concern that we could potentially trigger more
in the way of outflows," he added. "And when he talks about
needing more production, that is going to take quite a long
time." 
    The Argentine peso fell after the country's central
bank removed the 60 percent floor on its benchmark interest
rate.
    "At the margin you could argue that it is ARS negative,"
Lawrence said, but said he does not see the removal as a
"game-changer" given that the policy has not been in place for
that long and as other factors such as high inflation persist. 
    Meanwhile, stocks in Brazil were propped up by gains
in meat packer JBS on positive comments from its
chief executive, and state-oil firm Petrobras after
it unveiled plans to boost asset sales and investments.

         
    Key Latin American stock indexes and currencies at 2120 GMT:
      Stock indexes          Latest      Daily    YTD pct
                                          pct      change
                                         change   
 MSCI Emerging Markets         1001.91     -1.22    -13.51
                                                  
 MSCI LatAm                    2598.40     -0.51     -8.12
                                                  
 Brazil Bovespa               89039.79      0.47     16.54
                                                  
 Mexico IPC                   41905.67       0.1    -15.09
                                                  
 Chile IPSA                    5141.89     -0.14     -0.14
                                                  
 Argentina MerVal             31779.87     -0.56      5.70
                                                  
 Colombia IGBC                12057.84      0.67      6.04
                                                  
                                                          
       Currencies             Latest    Daily %    YTD %
                                         change    change
 Brazil real                    3.8682     -0.01    -14.35
                                                  
 Mexico peso                   20.5111     -0.02     -3.96
                                                  
 Chile peso                      672.3     -0.30     -8.58
                                                  
 Colombia peso                    3159      0.48     -5.60
 Peru sol                        3.377      0.12     -4.15
                                                  
 Argentina peso                37.4500     -0.13    -50.33
 (interbank)                                      
                                                  
 

 (Reporting by Susan Mathew in Bengaluru; Editing by Leslie
Adler)
  
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