EMERGING MARKETS-Argentine stocks tumble after U.S. court decision

lunes 16 de junio de 2014 11:47 GYT
 

SAO PAULO, June 16 (Reuters) - Argentine stocks plunged  on
Monday after the U.S. Supreme Court declined to hear the
country's appeal to avoid paying $1.33 billion to hedge fund
creditors, sparking fears of a default. 
    Other Latin American stocks also declined, with the MSCI
Latin American stock index slipping for the
third straight session as concern over escalating global
geopolitical tensions sapped appetite for riskier investments.
    The U.S. Supreme Court on Monday left intact lower court
rulings that ordered Argentina to pay holdout creditors, which
the country had warned could lead to a default on its sovereign
debt. 
    Argentina's Merval stock index dropped over 5
percent in early trading, on track for its biggest one-day loss
in nearly seven months.
    "This ruling is the last thing that the government needs
given that the economy appears to have slipped into recession in
the first quarter," wrote Capital Economics' David Rees on
Monday. "Whatever the government intends to do, it needs to make
up its mind quickly with a coupon payment due on 30th June."
    Brazilian, Mexican and Chilean stocks all fell slightly,
tracking global markets lower as violence escalated in Iraq and
Ukraine. 
    "Between the World Cup, the approaching summer, rising
geopolitical risk, and a generally weaker tone for risky assets
in global markets, the recovery in emerging market assets may be
placed on hold near-term," Brown Brothers Harriman analysts
wrote in a client note on Monday.
    Currencies tracked lower across the region, with traders
keeping a watchful eye on the outlook for global interest rates
ahead of the U.S. Federal Reserve's next monetary policy
announcement, scheduled for Wednesday. 
    "The Fed probably won't raise interest rates but it should
note an improvement in the economy and that can cause market
stress," said Celso Siqueira, head of currency trading at
brokerage firm Advanced in Sao Paulo.
    Colombia's peso traded slightly lower a day after
President Juan Manuel Santos won re-election. 
    "By re-electing President Santos, Colombia voted for the
continuation of peace negotiations between the government and
the FARC," BNP Paribas' Nader Nazmi wrote on Monday, adding that
a peace agreement "could potentially lift Colombia's long-term
GDP growth rate." 
    
    Key Latin American stock indexes and currencies at 1531 GMT:
    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1045,54     -0,34      4,63
                                                    
 MSCI LatAm                      3380,33     -0,42      6,06
                                                    
 Brazil Bovespa                 54664,61     -0,26      6,13
                                                    
 Mexico IPC                     42334,85     -0,35     -0,92
                                                    
 Chile IPSA                      3851,95     -0,29      4,13
                                                    
 Chile IGPA                     18842,76     -0,23      3,38
                                                    
 Argentina MerVal                7558,05     -6,08     40,20
                                                    
 Colombia IGBC                  14328,57      0,48      9,62
                                                    
 Peru IGRA                      16251,11      0,25      3,16
                                                    
 Venezuela IBC                   2163,19     -0,09    -20,95
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2,2345     -0,22      5,47
                                                    
 Mexico peso                     13,0341     -0,15     -0,03
                                                    
 Chile peso                          557     -0,07     -5,55
                                                    
 Colombia peso                   1886,59     -0,26      2,41
 Peru sol                          2,793     -0,21      0,00
                                                    
 Argentina peso (interbank)       8,1325     -0,03    -20,17
                                                    
 Argentina peso (parallel)          11,9     -1,51    -15,97
                                                    
 
 (Reporting by Asher Levine and Bruno Federowski Editing by W
Simon)