July 19, 2016 / 4:21 PM / 2 years ago

EMERGING MARKETS-Latam currencies down on global growth concerns

By Bruno Federowski
    SAO PAULO, July 19 (Reuters) - Latin American currencies
weakened on Tuesday as renewed concerns over global growth
triggered profit-taking following a weeks-long rally.
    Traders cited a drop in German investor sentiment as well as
a downward revision in the International Monetary Fund's
estimates for global growth, both prompted by Britain's decision
to leave the European Union.  
    Worries that the U.S. Federal Reserve could increase rates
this year if financial markets remain calm also drove investors
to sell emerging market assets, which often depend on higher
yields to lure foreign capital.
    "Markets had been too calm recently, which often leads to
profit-taking," said Glauber Romano, an FX trader with Intercam
brokerage in São Paulo.
    Both the Brazilian real and the Mexican peso 
weakened as much as 1 percent. Most stock markets in the region,
however, were slightly higher.
    Mexico's benchmark IPC stock index rose to a new
record high, supported by consumer discretionary shares such as
SACI Falabella. Traders bet that economic strength in
the United States could provide a boost to Latin America's
second-largest economy.
    Brazil's Bovespa index was nearly flat as a rally in
shares of state-controlled oil company Petróleo Brasileiro SA
 offset the negative tone abroad. 
    Expectations that Petrobras, as the company is known, will
sell part or all of its fuel distribution unit BR Distribuidora
SA boosted shares to their highest level in a year. 
    Shares in Oi SA, which are not part of the index,
slumped as much as 21 percent on concerns that its debt burden
could be higher than previously reported. The phone carrier
filed for Brazil's biggest ever creditor protection in June.

    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               866.67     -0.4    9.57
 MSCI LatAm                         2374.78    -0.41   30.32
 Brazil Bovespa                    56418.05    -0.12   30.15
 Mexico IPC                        47038.01     0.16    9.45
 Chile IPSA                         4129.17     0.41   12.20
 Chile IGPA                        20356.66     0.36   12.15
 Argentina MerVal                  16110.27     0.69   37.99
 Colombia IGBC                      9931.17    -0.18   16.19
 Venezuela IBC                     12242.70    -1.37  -16.08
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.2781    -0.87   20.41
 Mexico peso                        18.5605    -0.93   -7.17
 Chile peso                           651.4    -0.45    8.95
 Colombia peso                      2932.17    -0.39    8.09
 Peru sol                             3.292    -0.27    3.71
 Argentina peso (interbank)         15.2375    -0.51  -14.80
 Argentina peso (parallel)            15.31     0.52   -6.79

 (Reporting by Bruno Federowski; Editing by Paul Simao)
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