EMERGING MARKETS-Brazil real underperforms Latam currencies on S&P downgrade

jueves 18 de febrero de 2016 17:13 GYT

(Updates prices)
    By Bruno Federowski
    SAO PAULO, Feb 18 (Reuters) - The Brazilian real
underperformed on Thursday after the country received a rating
downgrade, while Latin American markets broadly inched higher
due to hopes for a stabilization in oil prices.
    Citing considerable economic and political challenges,
Standard & Poor's downgraded Brazil deeper into junk territory.
The currency closed down 1.4 percent at 4.046 to the
    Traders said the cut means it will take longer for Brazil to
recoup its investment grade once it manages to escape ongoing
economic and political crisis.
    S&P's decision also contributed to a drop in shares of
Brazilian banks, which are particularly sensitive to ratings
decisions.  Stocks of Itaú Unibanco SA and Banco
Bradesco SA were also pressured by a price-target cut
by Credit Suisse.
    Brazil's benchmark Bovespa stock index closed down
0.4 percent, as it continues to be the worst-performing major
market in Latin America.
    The Mexican peso jumped for a second day, climbing
0.4 percent, after the country announced a surprise interest
rate hike, a new intervention policy and budget cuts.
    The currency has been strongly hit by weakness in the price
of oil, which accounts for a large share of the country's
exports and tax revenue.
    Mexico's IPC stock index fell 0.3 percent after oil
prices pared their gains when data showed a build up in U.S.
crude oil inventories. 
    Venezuela, also a major oil producer, devalued its currency
and raised heavily subsidized fuel prices on Wednesday as it
grapples with galloping inflation and a deep
    "Although the adjustments are positive and cannot be
considered negligible, probably even exceeding market
expectations, we remain of the opinion that they are too little
and probably come too late," Barclays analyst Alejandro Arreaza
wrote in a client note.
    Yields paid on Venezuela's benchmark global 2027 bond
 fell even after the central bank said the country's
inflation hit 180.9 percent and the economy contracted 5.7
percent last year. 
    Latin American stock indexes and currencies at 2050 GMT:
 MSCI Emerging Markets            744.67      1.21     -7.35
 MSCI LatAm                      1760.12     -0.57     -3.26
 Brazil Bovespa                 41477.63     -0.37     -4.32
 Mexico IPC                     43488.20     -0.22      1.19
 Chile IPSA                      3768.24      0.79      2.39
 Chile IGPA                     18459.61      0.66      1.70
 Argentina MerVal               11991.07     -0.56      2.71
 Colombia IGBC                   9056.00      0.36      5.95
 Venezuela IBC                  16034.63      2.85      9.91
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                       4.046     -1.36     -2.51
 Mexico peso                     18.3225      0.20     -6.34
 Chile peso                       703.52     -0.47      0.87
 Colombia peso                   3339.71      0.48     -5.38
 Peru sol                          3.507     -0.11     -2.72
 Argentina peso (interbank)      15.0200     -0.13    -15.69
 Argentina peso (parallel)          15.3      0.13     -7.22
 (Additional reporting by Paula Arend Laier and Anna Yukhananov;
Editing by Bernadette Baum, Bernard Orr)