EMERGING MARKETS-Latam currencies drop on China concern, stocks steady

Tue Mar 11, 2014 5:23pm EDT

By Walter Brandimarte
    RIO DE JANEIRO, March 11 (Reuters) - Latin American
currencies extended their recent slide on Tuesday on lingering
concern about falling Chinese demand for the region's
commodities exports, but stock indexes steadied after a recent
sell-off.
    Chile's peso led losses among regional currencies,
falling 0.8 percent to its weakest in nearly five years, after
prices of copper, the country's main export, tumbled to
three-year lows. 
    The Brazilian real  closed 0.6 percent weaker
in its fourth straight session of losses, even as the central
bank provided investors with protection against a weaker
exchange rate by selling currency swaps.
    "With iron ore prices falling, it will be much harder for
the Brazilian real to 'graduate' from the Fragile Five basket by
showing good trade numbers," Citi strategist Kenneth Lam wrote
in a note to clients. He referred to the currencies of Brazil,
India, Indonesia, Turkey and South Africa, which Morgan Stanley
said are poised to underperform due to their countries' current
account deficits.
    The Mexican peso lost 0.4 percent in its third
straight session of declines.
    Latin American stocks halted a two-day sell-off, however,
with the MSCI benchmark index for the region 
little changed, near its lowest since Feb. 6.
    Brazil's Bovespa stock index edged 0.4 percent
higher, although shares of mining and steel companies continued
their decline as prices of iron ore fell to 17-month lows.
    Preferred shares of Vale SA, the world's largest
iron ore producer, fell 1 percent to 26.10 reais, an eight-month
low. Companhia Siderurgica Nacional, Brazil's No. 3
steelmaker and No. 2 iron ore producer, fell 2.3 percent to 8.65
reais.
    Supporting gains in the Bovespa index were shares of bank
Ita├║ Unibanco and those of state-run oil firm
Petrobras. 
    Petrobras gained 0.8 percent and recovered part of the
losses it recorded on the previous day, when it sold $8.5
billion in global notes.  
    
    Key Latin American stock indexes and currencies at 2055 GMT:
    Stock indexes                    daily %     YTD %
                     Latest          change      change
 MSCI Emerging       955.89          0.09        -4.67
 Markets                                         
 MSCI LatAm          2881.78         0.07        -9.97
                                                 
 Brazil Bovespa      45697.62        0.36        -11.28
                                                 
 Mexico IPC          38689.57        0.05        -9.45
                                                 
 Chile IPSA          3659.3          0.19        -1.08
                                                 
 Chile IGPA          18104.77        0.17        -0.67
                                                 
 Argentina MerVal    5754.38         -0.61       6.74
                                                 
 Colombia IGBC       12922.66        0.96        -1.14
                                                 
 Peru IGRA           15110.22        0.09        -4.08
                                                 
 Venezuela IBC       2642.39         -1.53       -3.44
                                                 
                                                 
 Currencies                          daily %     YTD %
                           Latest    change      change
 Brazil real         2.3666          -0.62       -0.41
                                                 
 Mexico peso         13.2775         -0.47       -1.86
                                                 
 Chile peso          574.2           -0.78       -8.38
                                                 
 Colombia peso       2044.35         -0.14       -5.50
                                                 
 Peru sol            2.801           0.00        -0.29
                                                 
 Argentina peso      7.8650          -0.03       -17.45

 Argentina peso      10.8            1.39        -7.41

<--------------------------------------------------------------
    GRAPHIC on emerging market FX performance 2014:GRAPHIC on MSCI emerging index performance 2014:-------------------------------------------------------------->
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