January 6, 2020 / 2:36 PM / 7 months ago

EMERGING MARKETS-Latam assets slip as U.S.-Iran tensions heat up

    By Shreyashi Sanyal
    Jan 6 (Reuters) - Latin American assets slipped on Monday,
as escalating tensions between the United States and Iran after
the killing of a top Iranian general continued to push investors
away from risk, while the Chilean peso hit a three-week low.
    MSCI's index for Latin American stocks fell
nearly 1%, on track to log its second day of declines, after the
killing of Iranian Major-General Qassem Soleimani on Friday
spurred a bout of safe-haven buying. The Latin American equity
index had risen 9.8% last month. 
    Assets across the developing world had a solid end to 2019,
helped by the cooling of trade tensions between Washington and
Beijing, but analysts now point to rising geopolitical
uncertainties moving back to center stage at the beginning of
the year.
    "We don't think the newest flashpoint will derail the green
shoots emerging in the global economy and yet it's powerful
enough to trigger a positioning squeeze, especially in
equities," Mark McCormick global head of FX strategy at TD
Securities, wrote in a note. 
    MSCI's index for Latin American currencies
dropped 0.3%. Chile's peso led declines with a 1.2% fall.
    The currency touched its lowest level since December 11,
with falling prices of the country's main export, copper,
exacerbating its decline. Copper eased as a survey showed
slowing growth in China's services sector. 
    Crude exporter Colombia's peso, held steady as oil
prices gained more than 1.5%.
    The Brazilian real gained ground after two days of
declines. A purchasing managers survey showed Brazilian economic
activity in December grew at its slowest pace in six months as a
slight improvement in the services sector failed to compensate
for a more disappointing performance in manufacturing.
    Key Latin American stock indexes and currencies at 1419 GMT:
   Stock indexes             Latest      Daily %
 MSCI Emerging Markets         1111.81      -1.07
 MSCI LatAm                    2939.39      -0.98
 Brazil Bovespa              116698.63      -0.86
 Mexico IPC                          -          -
 Chile IPSA                    4805.97       -0.7
 Argentina MerVal                    -          -
 Colombia COLCAP               1676.49       1.07
       Currencies            Latest      Daily %
 Brazil real                    4.0590      -0.10
 Mexico peso                   18.8520       0.34
 Chile peso                      773.5      -2.24
 Colombia peso                 3249.88       0.00
 Peru sol                       3.3208      -0.17
 Argentina peso                59.8200       0.00

 (Reporting by Shreyashi Sanyal in Bengaluru)
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