November 13, 2018 / 4:21 PM / 6 months ago

EMERGING MARKETS-Latam stocks, currencies fall; investor sentiment remains dim

    By Aaron Saldanha and Susan Mathew
    Nov 13 (Reuters) - Latin American currencies and stocks fell
on Tuesday with Mexico's peso plumbing a near five-month trough
as investor sentiment towards Mexico and broader Latin America
remained skittish.
    The MSCI index of currencies in Latin America
 fell 1 percent, while the stock index for the
region dropped 1.9 percent to hit its lowest in
one and a half months.
    Stocks on Mexico's benchmark extended Monday's 2.2
percent drop to slide 1.2 percent, leaving them trading at their
lowest level since February 2016.
    Mexican markets have been shaken and stirred in recent
weeks, initially by the scrapping of an already begun airport
project after a public consultation.
    Close on the heels of that, a senator's proposal last week
to cap and eliminate certain banking commissions jolted
investors. Contradictory signals by the senator and
President-elect Andres Manuel Lopez Obrador have only heaped on
the uncertainty.    
    "There is lot of concern that we may see government missteps
further down the line. That's what is being priced into Mexico
right now," said Christian Lawrence, a senior market strategist
with Rabobank.
    Lawrence added he was revising his predictions to factor in
the Mexico's central bank hiking borrowing costs by 25 basis
points on Thursday, a consequence of the uncertainty.

    The Mexican peso fell half a percent to plumb a near
five month low. It has slid about 4.2 percent from last
Tuesday's close. 
    The Argentine peso led losses among regional
currencies more than 2 percent after ratings firm Standard &
Poors lowered the country's long-term rating.
    Argentine stocks fell for a fourth straight session,
pulled half a percent lower on losses in energy stocks.

    Brazil stocks were 1.4 percent lower on across the
board. Energy stocks weighed the most, hit by declining oil
prices. Petroleo Brasileiro SA fell 3.3 percent.

    Brazil's real slid to levels last seen in early
October on persistent disappointment that pension reform,
closely watched by investors, would be unlikely to be passed
this year.
    "As much as the market predicted that pension reform would
not come out this year, there was some expectation ... it
creates some discomfort," said Pablo Syper, head of trading at
Mirae Asset Global Investimentos.          
    Latin American stock indexes and currencies at 1608 GMT
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          967.05      0.07    -16.58
 MSCI LatAm                    2556.02     -1.85     -7.92
 Brazil Bovespa               84327.00      -1.4     10.37
 Mexico IPC                   42785.53     -1.21    -13.31
 Chile IPSA                    5145.88     -0.14     -0.14
 Argentina MerVal             29239.62     -0.62     -2.75
 Colombia IGBC                12151.98     -1.65      6.87
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    3.8044     -1.28    -12.91
 Mexico peso                   20.4980     -0.67     -3.90
 Chile peso                        693     -0.84    -11.31
 Colombia peso                 3199.76     -0.80     -6.81
 Peru sol                         3.36      0.42     -3.66
 Argentina peso                36.1800     -1.46    -48.59
 (Reporting by Aaron Saldanha and Susan Mathew in Bengaluru;
editing by Grant McCool)
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