EMERGING MARKETS-Brazil underperforms after Moody's cuts country to junk

miércoles 24 de febrero de 2016 17:53 GYT

(Updates with latest prices)
    By Bruno Federowski
    SAO PAULO, Feb 24 (Reuters) - The Brazilian stock index
underperformed Latin American markets on Wednesday after Moody's
Investors Service became the latest ratings agency to cut the
country's debt rating to junk, downgrading it by two notches.
    Other Latin American indices mostly erased earlier losses
after a rally in oil prices, lifting markets in
commodity-exporting countries.
    Citing economic and political turmoil, Moody's became the
third major agency to downgrade Brazil's debt to junk, cutting
it two notches to Ba2. 
    "The market expected a cut but the magnitude caught me by
surprise," said Thiago Castellan Castro, a trader with
Renascença brokerage in São Paulo.
    Brazil's Bovespa index closed down 1.1 percent,
compared to just a 0.1 percent loss on Mexico's main stock index
. Shares of state-controlled oil company Petroleo
Brasileiro SA, whose rating will likely also be
lowered soon on the back of the sovereign downgrade, fell as
much as 5 percent.
    Nevertheless, traders saw limited room for weakness,
pointing out that Brazilian credit default swaps (CDS) had been
trading at levels consistent with a lower rating even before the
    The Brazilian real, meanwhile, reversed earlier
losses to end up 0.1 percent after oil rallied as much as 3
percent after news of stalled loadings in the North Sea and
strong demand for gasoline. 
    The news also helped lift Mexico's peso and erase
most losses for Colombia's peso.
    Argentina's MerVal stock index rose 0.7 percent to
its highest in more than two months after the country and major
creditors neared a deal to resolve a long-running $5 billion
    Latin American stock indexes and currencies at 2100 GMT:
 Indexes                     Latest        Daily pct  YTD pct
                                           change     change
 MSCI Emerging Markets             737.52      -0.97      -6.22
 MSCI LatAm                      1,779.48      -0.47      -2.29
 Brazil Bovespa                 42,049.93      -1.11      -3.00
 Mexico IPC                     43,175.70      -0.09       0.46
 Chile IPSA                      3,678.46      -1.02      -0.05
 Chile IGPA                     18,090.68      -0.82      -0.34
 Argentina MerVal               12,627.13       0.74       8.15
 Colombia IGBC                   8,982.05      -0.15       5.09
 Venezuela IBC                  16,674.77       2.36      14.30
 Currencies                                Daily pct    YTD pct
                                              change     change
 Brazil real                       3.9558       0.11      -0.22
 Mexico peso                      18.1950       0.05      -5.60
 Chile peso                         695.8      -0.02       1.96
 Colombia peso                   3,335.97      -0.36      -5.26
 Peru sol                          3.5291       0.03      -3.37
 Argentina peso (interbank)       15.3450       0.03     -18.20
 Argentina peso (parallel)          15.53      -0.65      -8.83
 (Additional reporting by Paula Arend Laier and Anna Yukhananov)