December 6, 2018 / 2:20 PM / 10 days ago

EMERGING MARKETS-Global sell-off spreads to Latin America; Mexican peso hits 5-month low

    By Aaron Saldanha and Agamoni Ghosh
    Dec 6 (Reuters) - Latin American stocks and currencies were
swept up in a global sell-off on Thursday as weak sentiment
prevailed after the arrest of a top executive of Chinese tech
giant Huawei sparked fresh concerns about the U.S.-China trade
war.     
    The arrest of Huawei Chief Financial Officer Meng Wanzhou,
who is the daughter of the firm's founder, roiled global markets
as Washington and Beijing prepare for crucial trade
negotiations.
    "It's negative for China...if it's negative for China, it's
also (negative) for emerging countries," said Fernanda Consorte,
an exchange strategist with Brazil-based Ourinvest Bank, noting
the potential fallout on exports from Brazil, Latin America's
top economy.   
    MSCI's index of Latin America stocks tumbled
1.9 percent, set for its worst one-day performance in 1-1/2
weeks. Its Latin America currencies index was
down 0.6 percent.
    Mexico's peso, considered to be a weathervane of
trade sentiment, fell half a percent and plumbed a more than
five-month low while Brazil's real softened 1.5 percent. 
    Mexico's peso is likely to bounce back from recent declines
but by a smaller amount than previously expected, a Reuters Poll
found, underscoring strategists' growing concerns about new
President Andrés Manuel López Obrador's management of the
country's economy.
    Lopez Obrador said on Wednesday he would not cancel
contracts issued to foreign and national oil firms by his
predecessor but challenged them to pump oil quickly or no
further fields would be offered.
    A broad-based, 1 percent decline in Brazil's Bovespa index
was driven by the energy sector. Global oil prices were
hit by the Organisation of the Petroleum Exporting Countries
signalling it may agree to a smaller output cut than expected.

   State-controlled oil firm Petroleo Brasileiro SA
(Petrobras) lost 2.6 percent to lead losses on the Bovespa index
, with the firm's preferred and common shares accounting
for nearly 300 points of the Bovespa's 954-point drop.  
    Brazilian antitrust watchdog Cade will begin an
investigation on Wednesday that may result in mandatory sales of
refineries by Petrobras.
    Mining giant Vale SA slid 1.7 percent, hurt by
worries over U.S.-China trade, following its basic resources
peers in Europe.
    Chile's peso started the day with a sharp drop against the
dollar aided by a slide in the price of copper - the country's
main export.
    
    Key Latin American stock indexes and currencies at 1401 GMT 
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          978.42     -2.34    -13.51
                                                  
 MSCI LatAm                    2548.65     -1.91     -8.12
                                                  
 Brazil Bovespa               88113.62     -1.04     15.33
                                                  
 Mexico IPC                          -         -         -
                                                  
 Chile IPSA                    5098.64     -0.84     -0.84
                                                  
 Argentina MerVal                    -         -         -
                                                  
 Colombia IGBC                       -         -          
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.9253     -1.47    -15.59
                                                  
 Mexico peso                   20.6080     -0.55     -4.41
                                                  
 Chile peso                     677.81     -0.81     -9.32
                                                  
 Colombia peso                 3184.15     -0.89     -6.35
 Peru sol                        3.382     -0.15     -4.29
                                                  
 Argentina peso                38.0500     -1.42    -51.12
 (interbank)                                      
                                                  
 
 (Reporting by Agamoni Ghosh and Aaron Saldanha in Bengaluru
Additional reporting by Claudia Violante
Editing by Frances Kerry)
  
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