July 6, 2016 / 3:57 PM / 2 years ago

EMERGING MARKETS-Latam stocks, currencies fall as Brexit woes linger

By Bruno Federowski
    SAO PAULO, July 6 (Reuters) - Latin American stocks and
currencies fell on Wednesday as traders continued to fret over
the fallout from Britain's decision to leave the European Union.
    Financial market volatility stemming from Britain's June 23
referendum raised worries about global financial stability,
putting central banks on alert.
    Mexico's central bank hiked interest rates more aggressively
than expected last week to curb currency weakness, but the peso
  nevertheless weakened for a fourth consecutive
trading day on Wednesday.
    The Brazilian real also declined for a fourth
straight session, weighed down by central bank intervention. The
bank resorted to purchasing dollars in futures markets after the
real closed June with its biggest monthly advance in 13 years.
    Also pressuring demand for Brazilian assets were concerns
that interim President Michel Temer's government could announce
an unambitious fiscal target for 2017.
    "If next year's primary deficit looks like this year's it
will be horrendous. It would raise doubts about a lack of fiscal
effort," said Arnaldo Curvello, Ativa brokerage head of asset
    Three government officials told Reuters on Tuesday that
Brazil will set a 2017 primary budget deficit target smaller
than the 170.5 billion reais ($51 billion) expected for this
    Shares of education companies were among the biggest losses
in Brazil's Bovespa benchmark stock index on lingering
uncertainty over corporate deals in the sector.
    Shares of Estácio Participações SA fell 3.4
percent after its second largest shareholder resigned as chief
executive officer following a month-long bidding battle for
Brazil's No. 2 private college operator. Zaher will take up a
position in the company's board, Estácio said in a statement.
    Kroton Educacional SA, whose bid for Estácio
received the board's seal of approval on Thursday, fell 2.7

    Key Latin American stock indexes and currencies at 1530 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               818.71    -1.56     4.73
 MSCI LatAm                         2182.37    -2.13    21.87
 Brazil Bovespa                    51122.12    -1.39    17.93
 Mexico IPC                        45261.81    -1.22     5.32
 Chile IPSA                         4007.02    -0.28     8.88
 Chile IGPA                        19784.34    -0.21     9.00
 Argentina MerVal                  14491.29    -2.13    24.12
 Colombia IGBC                      9673.33    -0.14    13.17
 Venezuela IBC                     11594.66     -7.3   -20.52
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.3294    -0.90    18.55
 Mexico peso                        18.8455    -0.16    -8.57
 Chile peso                           665.4    -0.36     6.66
 Colombia peso                      3007.52    -0.88     5.38
 Peru sol                             3.278     0.18     4.15
 Argentina peso (interbank)         14.7550     0.32   -12.01
 Argentina peso (parallel)            14.88     0.81    -4.10

 (Reporting by Bruno Federowski; Additional reporting by Flavia
Bohone and Paula Arend Laier; Editing by Frances Kerry)
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