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Mercados

EMERGING MARKETS-Argentine stocks outperform broader Latam after sovereign rating upgrade

    * Fitch follows S&P in upgrading Argentina's rating
    * Latam stocks fall tracking Wall Street
    * Peruvian central bank meeting in focus

 (Adds details, updates prices)
    By Susan Mathew and Ambar Warrick
    Sept 10 (Reuters) - Argentine stocks outperformed their
peers on Thursday after ratings agency Fitch upgraded the
country's sovereign rating, while broader Latin American stocks
and currencies gave up early gains tracking volatility on Wall
Street.
    The Merval stock index rose more than 1%, and was
the sole gainer among its regional peers for the day. Argentine
bonds also rose, with those maturing in 2028 up
nearly 9%. 
    Fitch was the second major agency to upgrade Argentina's
sovereign rating after S&P earlier this week, citing completion
of distressed debt exchanges on its foreign currency sovereign
debt securities in both local and external markets.
    A risk indicator showed that investor perception of
Argentine debt had improved since the successful restructuring
of foreign and local sovereign bonds.
    Wall Street reacted to elevated weekly jobless claims
numbers in the United States that underscored a tough economic
recovery from the novel coronavirus pandemic.
    The MSCI's index of Latin American stocks
fell 2%. Regional stocks face a long road to prepandemic levels
because of increasing infection rates and middling economic
data.
    Brazil's real traded flat after increased retail
sales came in four times more than estimated on easing of
coronavirus-induced lockdowns improving economic activity.
 
    Analysts warn that more pain may be in store for the real,
which is among the worst performing emerging markets currencies
so far this year, down about 24%. 
    "Disagreements over various reform projects against the
background of narrow fiscal and monetary policy leeway act as a
burden. We therefore do not expect a stronger real until next
year at the earliest and after the corona crisis has been priced
out," wrote Commerzbank FX analysts Melanie Fischinger and
You-Na Park-Heger in a note. 
    Mexico's peso retreated from six-month highs, having
almost reclaimed the entirety of its pandemic-induced losses.
    Peru's sol inched lower ahead of a central bank
meeting on Thursday. Credit Suisse analysts expect the bank to
hold the key interest rate at 0.25% until 2021.   
    "The bank will likely underline that it considers
appropriate to keep a strongly expansive monetary stance for a
prolonged period," said CS analyst Alberto J. Rojas. 
    Chile's peso edged lower. Analysts expect its central
bank to hold the benchmark interest rate steady at 0.5% for at
least the next 18 months and see the rate hitting 1% within two
years.
    
    Latin American stock indexes and currencies:
    
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets         1084.41             -0.12
                                        
 MSCI LatAm                    1965.48             -1.95
                                        
 Brazil Bovespa               99487.14             -1.78
                                        
 Mexico IPC                   36162.52              0.01
                                        
 Chile IPSA                    3687.83             -2.22
                                        
 Argentina MerVal             47004.17              1.04
                                        
 Colombia COLCAP               1223.58             -1.32 Currencies             Latest     Daily % change
 Brazil real                    5.3109             -0.22
                                        
 Mexico peso                   21.4760             -0.58
                                        
 Chile peso                      772.4             -0.80
                                        
 Colombia peso                 3708.63             -0.09
 Peru sol                       3.5438             -0.20
                                        
 Argentina peso                74.8300             -0.08
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; editing by Grant
McCool)
  
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