EMERGING MARKETS-Latam currencies, stocks slide after Brexit vote

viernes 24 de junio de 2016 11:17 GYT
 

By Bruno Federowski
    SAO PAULO, June 24 (Reuters) - Latin American currencies and
stocks plunged on Friday after Britain voted "Leave," to exit
the European Union, as global market volatility upset a
week-long rally driven by expectations of a victory by the
"Remain" camp.
    But analysts said the impact of the shock would likely be
short-lived, as central banks worldwide pledged to stabilize
financial markets as needed.
    Mexico's peso weakened by as much as 6.7 percent to
a new record low at 19.5225 per dollar, before recovering about
half the lost ground, supported by the prospect of central bank
intervention.
    Many investors use the highly-liquid peso, the only currency
in Latin America that trades around the clock, as a way to hedge
bets on the region as a whole. Traders also used the currency as
a means to speculate on the British referendum due to its high
correlation with the British pound.
    Senior Mexican officials said on Friday the central bank is
ready to act on interest rates and the sharply depreciated local
peso. The central bank stopped short of taking immediate action
on interest rates, but said it was opportune that the bank holds
its regular rate-setting meeting next Thursday. 
    The comments echoed statements by central bank officials in
Brazil and around the world promising to take whatever measures
were necessary to keep financial and currency markets
functioning normally. 
    "Once the dust settles, we think the decision is unlikely to
have a sustained impact, at least for regions other than Central
and Eastern Europe," HSBC analysts wrote in a client note.
    "It is more about major central banks such as the Bank of
Japan and European Central Bank exporting negative rates and the
stalling of U.S. Fed rate hikes."
    The Brazilian real outperformed its peers as traders
remained cautiously optimistic that a new interim government
will manage to approve fiscal austerity measures seen as
necessary to regain investors' trust.
    Brazil's benchmark Bovespa stock index was the
hardest hit in the region, however, falling 3 percent due to
sharp drops in blue-chip stocks often used by foreign investors
to bet on emerging markets.
    Brazilian oil company Petroleo Brasileiro SA and
mining giant Vale SA both fell about 6 percent,
leading losses on the index.
    
    Key Latin American stock indexes and currencies at 1430 GMT:
 Stock indexes                     Latest       Daily     YTD
                                                  pct     pct
                                               change  change
 MSCI Emerging Markets                806.66    -3.44     5.2
 MSCI LatAm                         2,130.71     -3.9   21.17
 Brazil Bovespa                    49,968.98    -3.09   15.27
 Mexico IPC                        44,913.93    -2.67    4.51
 Chile IPSA                         3,949.19    -1.82    7.31
 Chile IGPA                        19,534.34    -1.61    7.62
 Argentina MerVal                  13,726.91    -3.62   17.57
 Colombia IGBC                      9,786.78    -1.28   14.50
 Venezuela IBC                     13,296.72    -4.73   -8.85
                                                             
 Currencies                           Latest    Daily     YTD
                                                  pct     pct
                                               change  change
 Brazil real                          3.3695    -0.76   17.14
 Mexico peso                         18.8300    -3.24   -8.50
 Chile peso                              679    -1.52    4.52
 Colombia peso                      2,977.28    -2.78    6.45
 Peru sol                             3.3205    -1.10    2.82
 Argentina peso (interbank)          14.7600    -2.10  -12.04
                                                       
 Argentina peso (parallel)              14.7    -0.95   -2.93
                                                       
 
 (Reporting by Bruno Federowski; editing by Brad Haynes, G
Crosse)