July 25, 2019 / 3:36 PM / in 4 months

EMERGING MARKETS-Brazilian stocks fall as fiscal woes cloud earnings

    By Agamoni Ghosh
    July 25 (Reuters) - Brazil's Bovespa pulled Latin American
shares lower on Thursday after data showed the region's largest
economy posted its biggest fiscal shortfall since January, but
robust earnings from beer-maker Ambev helped contain further
losses. 
    MSCI's index of Latin American stocks fell
1%, with heavyweight indexes in Brazil and Mexico
shedding about 0.7% each.
    Latest data showed Brazil posted a current account deficit
of $2.9 billion in June, the biggest shortfall since January and
almost twice as wide as the $1.5 billion deficit median forecast
in a Reuters poll.
    Brazil's economy is struggling to emerge from a crippling
recession, with the government focused on passing through
Congress a pension overhaul that it hopes will prop up public
finances and kick-start growth.
    Shares of Brazilian brewer Ambev, rose 8% after
the company posted better-than-expected quarterly results, while
Bradesco sagged despite a 25% rise in recurring
profit.
    Adding to the dour mood, European Central Bank Chief Mario
Draghi reiterated concerns about slowing global growth and all
but pledged future interest rate cuts. The ECB held rates steady
on Thursday.
    Emerging market currencies, which typically gain on bets of
interest rate cuts from developed world central banks, fell.
MSCI's index for Latin American currencies shed
0.5%. 
    The overall global data is just turning out to be quite
negative and it seems the relief for EM currencies that came on
the back of the Fed possibly lowering rates is starting to turn
around, said Christian Lawrence, senior strategist, Latam FX,
Rabobank.  
    The Mexican peso outperformed as oil prices moved
higher, while stocks dropped, weighed down by Cemex
, which slid nearly 4% after it posted downbeat
earnings that were hurt by lower volumes amid trade conflicts.
 
    Chile's peso fell 0.4%, tracking a dip in the price
of copper, the country's top export. The peso has shed
nearly 12% as the protracted trade war between the United States
and China has taken its toll on copper prices. 
    "Chile is increasingly becoming a proxy for the trade war in
this region because of that copper link," Lawrence said.        
    
    Key Latin American stock indexes and currencies at 1505 GMT
    
 Stock indexes                                    daily %
                            Latest                 change
 MSCI Emerging Markets              1055.01         -0.03
                                             
 MSCI LatAm                         2875.19         -0.88
                                             
 Brazil Bovespa                   103430.80         -0.66
                                             
 Mexico IPC                        40948.98         -0.53
                                             
 Chile IPSA                         4975.13          0.12
                                             
 Argentina MerVal                  39825.29           0.1
                                             
 Colombia IGBC                     12925.29          0.08
                                             
                                                         
 Currencies                                       daily %
                                     Latest        change
 Brazil real                         3.7820         -0.35
                                             
 Mexico peso                        19.0277          0.12
                                             
 Chile peso                             694         -0.55
                                             
 Colombia peso                      3207.35         -0.28
 Peru sol                             3.296         -0.06
                                             
 Argentina peso                     43.1300         -0.53
 (interbank)                                 
                                             
 

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Paul Simao)
  
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