November 12, 2018 / 9:50 PM / a month ago

EMERGING MARKETS-Latam stocks post longest losing streak in five months

 (Recasts throughout, updates prices, adds quote)
    By Aaron Saldanha
    Nov 12 (Reuters) - Latin American stocks on Monday posted
their longest run of daily losses in five months as cagey
investor sentiment weighed  on Mexican shares, which recorded
their lowest close in more than two and a half years.    
    MSCI's index of Latin America stocks dropped
0.8 percent, down for a fifth straight session, while a firm
dollar kept regional currencies pressured. 
    The MSCI index of Latin American currencies
fell 0.2 percent, as a 0.9 percent weakening in Brazil's real
 took its toll.
    Shares on Mexico's benchmark dropped 2.2 percent,
with the index ending at its lowest close since mid-February
2016, weighed on by banking stocks.
    Investor sentiment toward Mexico's incoming government has
been jolted in recent weeks. First, President-elect Andres
Manuel Lopez Obrador scrapped an already started airport project
after a public consultation. Then, a senator last week proposed
capping or eliminating certain banking commissions.
    Local stocks modestly gained on Friday after Lopez Obrador
signaled he would not support the bill. However, Senator Ricardo
Monreal's dismissal of the suggestion that Lopez Obrador was
trying to shut down the bill led investors to show renewed
jitters on Monday.
    Grupo Financiero Banorte, fell about 6.4
percent to its lowest close since March 2017, thrown into
renewed chaos by Monreal's statement.
    Bank of America Merrill Lynch downgraded the shares of
Banorte, the top weighted bank in the country's benchmark, to
neutral from a previous rating of buy. 
    Mexico's peso weakened for a third session in four,
down 1.1 percent. The currency, a weather vane for trade
sentiment, has tumbled about 12 percent from its 2018 peak seen
in mid-April.
    To stem a recent fall in the currency, the country's central
bank will raise borrowing costs by 25 basis points on Thursday
to take its key rate to a near decade high, a Reuters poll
predicts.     
    Increased uncertainty in domestic financial market since the
last monetary policy announcement in early October will factor
into the central bank hiking the key rate to 8 percent, said
Rafael Camarena, an economist with Santander in
Mexico. 
    Brazil's Bovespa stock index fell 0.1 percent, with
energy stocks among the biggest drags as global oil prices
 gave up large gains seen earlier in the day to decline.

    State-controlled oil firm Petroleo Brasileiro SA
lost half a percent on Monday after shedding 6.8 percent over
the course of last week.
    The real weakened 0.9 percent, hurt by
President-elect Jair Bolsonaro's comments that pension reform
would be hard to pass by the end of 2018. 
    In neighboring Argentina, the local benchmark fel1
1.6 percent, tracking a decline on Wall Street. The peso
weakened against the firm dollar.
    
    Key Latin American stock indexes and currencies at 2123 GMT
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          966.41        -1    -16.58
                                                  
 MSCI LatAm                    2604.24     -0.76     -7.92
                                                  
 Brazil Bovespa               85524.70     -0.14     11.94
                                                  
 Mexico IPC                   43297.80     -2.18    -12.27
                                                  
 Chile IPSA                    5153.00     -0.53     -0.53
                                                  
 Argentina MerVal             29423.30     -1.64     -2.14
                                                  
                                                          
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.7674     -0.31    -12.05
                                                  
 Mexico peso                   20.3570     -1.07     -3.23
                                                  
 Chile peso                      687.2     -0.39    -10.56
                                                  
 Colombia peso                 3174.25      0.13     -6.06
 Peru sol                        3.374     -0.12     -4.06
                                                  
 Argentina peso                35.4500      0.00    -47.53
 (interbank)                                      
                                                  
 

 (Reporting by Aaron Saldanha in Bengaluru; Editing by Lisa
Shumaker)
  
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