August 14, 2017 / 4:53 PM / a year ago

EMERGING MARKETS-LatAm stocks rebound as North Korea tensions ease

    By Bruno Federowski
    SAO PAULO, Aug 14 (Reuters) - Latin American stocks on
Monday rebounded from last week's selloff due to a pickup in
appetite for risky assets as tensions abated between the United
States and North Korea.
    Key U.S. officials on Sunday played down the prospect of an
imminent war with North Korea. Fears of a confrontation had
wiped out nearly $1 trillion from global equity markets last
    "Geo-political risks have fallen somewhat," strategists at
Scotiabank wrote in a report. However they cautioned that some
risk remained “of North Korea antagonizing the US over the next
week or so if missile testing is renewed."
    Emerging markets were pummeled last week after U.S.
President Donald Trump warned that the U.S. military was "locked
and loaded" if North Korea acted unwisely after threatening to
land missiles in the sea near the U.S. Pacific territory of
    Mexico's S&P/BVM IPC stock index rose 1.1 percent 
after posting its biggest weekly decline in eight months last
week. Brazil's benchmark Bovespa stock index touched the
highest level since May.
    Shares of power utility Cia Paranaense de Energia SA
 led the gains on the Brazilian index, rising for a
second day on a smaller-than-expected drop in second quarter
operating profits and a decision to cancel a sale of new stock.

    Moves in Latin American currency markets, however, were
subdued as investors watched for developments on the domestic
and regional fronts.
    The Mexican peso firmed 0.3 percent as
traders awaited negotiations between the United States, Mexico
and Canada over the North American Free Trade Agreement (NAFTA),
set to take place this year.
    Meanwhile, the Brazilian real seesawed ahead of an
expected revision to the government's fiscal goal. Reuters
reported last week that the government was poised to target a
wider primary budget deficit this year and the next as lawmakers
refused to back tax hikes.
    Key Latin American stock indexes and currencies at 1620 GMT:
 Stock indexes                                 daily %   YTD %
                                                change  change
 MSCI Emerging Markets                1054.03     1.08   20.94
 MSCI LatAm                           2791.14     1.31    17.7
 Brazil Bovespa                      68456.20     1.63   13.66
 Mexico S&P/BVM IPC                  51194.92     1.09   12.16
 Chile IPSA                           5072.38     0.78   22.19
 Chile IGPA                          25308.17     0.74   22.06
 Argentina MerVal                    22391.18      3.5   32.35
 Colombia IGBC                       10808.68     0.06    6.72
 Venezuela IBC                      186966.14     2.01  489.70
 Currencies                                    daily %   YTD %
                                                change  change
 Brazil real                           3.1777    -0.14    2.25
 Mexico peso                          17.7580     0.30   16.81
 Chile peso                             647.6    -0.19    3.57
 Colombia peso                        2966.25     0.26    1.19
 Peru sol                               3.243     0.03    5.27
 Argentina peso (interbank)           17.2400     2.73   -7.92
 Argentina peso (parallel)              18.12     1.99   -7.17
 (Reporting by Bruno Federowski; Editing by W Simon)
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