August 9, 2019 / 3:10 PM / 3 months ago

EMERGING MARKETS-Latam markets in the red as trade worries heighten

    By Sruthi Shankar
    Aug 9 (Reuters) - Latin American currencies were set to end
a tumultuous week on a soft note on Friday as worries about the
U.S.-China trade dispute and global growth kept investors on
edge.
    The Brazilian real fell about 0.5%, giving back some
of Thursday's gains of more than 1% when upbeat trade data from
China and a stabilizing yuan lifted risk appetite. 
    The mood was glum again on Friday after a Bloomberg report
that Washington was delaying a decision about allowing some
trade between U.S. companies and Huawei reminded investors that
the prolonged trade rift was far from over.
    President Donald Trump said on Friday that the United States
was continuing trade talks with China but was not going to make
a deal for now and would hold off on doing business with Huawei
until a deal is in place.
    "At this point in time, it's hard to see either the U.S. or
China having enough will to resolve their differences, much less
before the new U.S. tariffs on Chinese goods kick in on
September 1," said Han Tan, market analyst at FXTM.
    "Should the barriers to global trade be raised next month,
that would be another kick in the gut for risk appetite and may
prompt another sell-off in risk assets."
    Emerging market stocks were set to post a third
straight week of losses, while an index of Latin American
equities was on course to end the week flat.
    Sao Paulo-listed shares erased early gains as miner
Vale fell 2.4% due to a plunge in iron ore prices.
    However, a 7% jump in shares of  food processor BRF SA
 after the company swung back to profit after three
quarterly losses boosted the main index.
    Shares in healthcare insurer Qualicorp SA surged
27% to their highest since February 2018 after private hospital
group Rede D'Or Sao Luiz agreed to buy a 10% stake in the
company.
    After Brazil's pension reforms bill was passed in the lower
house of Congress on Wednesday, investors are awaiting a vote in
the Senate, which is expected to consider extending pension
reform to states and municipal governments.
    Investors will also be watching Argentina's election primary
on Sunday, which will determine President Mauricio Macri's
chances of winning a second term in October.
    The country's embattled peso, which has shed over 8%
in the past month, is expected to take another beating next week
if the business-friendly Macri fares worse than expected.
    The Mexican peso held largely steady after data
showed industrial output rose 1.1% in June, rebounding from a
contraction in the previous month. 
    
    Latin American stock indexes and currencies at 1454 GMT:
    
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets       981.02    -0.33
                                     
 MSCI LatAm                 2764.46    -0.15
                                     
 Brazil Bovespa           104080.43    -0.03
                                     
 Mexico IPC                40364.96    -0.18
                                     
 Chile IPSA                 4901.56    -0.17
                                     
 Argentina MerVal                 -        -
                                     
 Colombia IGBC             12560.29    -0.07
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 3.9388    -0.32
                                     
 Mexico peso                19.4208    -0.09
                                     
 Chile peso                   712.4    -0.51
                                     
 Colombia peso              3377.21    -0.32
                                     
 Peru sol                     3.378    -0.15
                                     
 Argentina peso             45.3900    -0.22
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru; Editing by Dan
Grebler)
  
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