September 19, 2019 / 2:34 PM / a month ago

EMERGING MARKETS-Real slides after Brazil cuts rates to record low, stocks rise

    By Agamoni Ghosh
    Sept 19 (Reuters) - Brazil's real fell to a two-week low on
Thursday,  underperforming its Latin American peers, as
investors assessed the impact of the central bank's decision to
cut borrowing costs to an all-time low. 
   The real slid 0.7% and interest rate futures tumbled
to new lows after the central bank signaled it was willing to
loosen monetary policy further in the face of an uncertain
global economic outlook and tame domestic inflation. 
    The decision to cut rates to a record low of 5.50% by the
bank's nine-member rate-setting committee, known as Copom, was
unanimous. 
    "The authority seems to reveal a bolder flight plan in terms
of new stimuli ahead," Rabobank strategists wrote in a note. 
    "Thus, we now look for two (instead of one) rate cuts of
50bp down the road, with Selic (overnight rate) ending the year
at 4.50%." 
    Other Latin American currencies including Mexico's peso
 and Colombia's peso made marginal gains.   
    MSCI's index of Latin American stocks
increased marginally, helped by Brazil's Bovespa, which
rose more than 1%, boosted by shares of state-run oil company
Petroleo Brasileiro. 
    Petrobras moved nearly 2% higher after the
company hiked the average price of gasoline at refineries by
3.5% and the price of diesel by 4.2%, a company representative
told Reuters.
     Telecommunications firm Oi also gained, up 1.6%,
after sources said it was in talks with Spain's Telefonica
 and Italy's Telecom Italia to sell its mobile
network to avoid insolvency.
    Mexican stocks were mostly flat, while those in
Colombia moved 0.3% lower. 
    Markets in Chile were shut for a public holiday. 

    Latin American stock indexes and currencies at 1410 GMT

 Stock indexes                                 daily % change
                           Latest           
 MSCI Emerging Markets             1018.80              -0.25
                                            
 MSCI LatAm                        2713.43               0.07
                                            
 Brazil Bovespa                  105478.04               0.91
                                            
 Mexico IPC                       43055.37              -0.03
                                            
 Chile IPSA                              -                  -
                                            
 Argentina MerVal                        -                  -
                                            
 Colombia IGBC                    12961.05              -0.43
                                            
                                                             
 Currencies                                    daily % change
                                    Latest  
 Brazil real                        4.1361              -0.72
                                            
 Mexico peso                       19.3681               0.15
                                            
 Chile peso                              -                  -
                                            
 Colombia peso                      3371.7               0.04
 Peru sol                           3.3538               0.11
                                            
 Argentina peso                    56.6100              -0.16
 (interbank)                                
                                            
 

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Steve
Orlofsky)
  
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