May 23, 2018 / 4:27 PM / a year ago

EMERGING MARKETS-Brazil stocks down on global trade concerns; Eletrobras drops

    By Bruno Federowski
    BRASILIA, May 23 (Reuters) - Brazilian stocks fell sharply
on Wednesday after comments by U.S. President Donald Trump
reignited concerns over global trade, while shares of
state-controlled power utility Centrais Elétricas Brasileiras SA
    The benchmark Bovespa stock index declined 1.7
percent, more than the 0.9 percent decline by an index tracking
Latin American stock markets.
    Global stocks suffered after Trump signaled a new direction
in U.S.-China trade talks and said any deal would need "a
different structure," fueling uncertainty over current
    Fears that a trade war between the world's top two economies
could damage global growth have kept a lid on appetite for risky
assets in recent months.
    A selloff in the Turkish lira due to growing investor
alarm over the direction of monetary policy under President
Tayyip Erdogan also kept investors wary of emerging markets.
    "There's some justifiable concern over Turkey (among
investors in Brazil) because it is also an emerging market and a
destination for investments that's comparable to Brazil. There's
always a fear of contagion," said Pablo Spyer, the head of
trading at Mirae.
    Falling shares of Eletrobras helped to intensify
losses in the Brazilian market after lower house speaker Rodrigo
Maia said a major bill related to its privatization is unlikely
to be put to a vote.
    But shares of meatpacker Marfrig Global Foods SA
jumped around 10 percent after it announced that five companies
have qualified to participate in a second phase of bidding for
Keystone Foods LLC. Binding proposals are expected next month,
Marfrig said.
    Key Latin American stock indexes and currencies at 1540 GMT:
 Stock indexes                             daily %    YTD %
                                  Latest    change   change
 MSCI Emerging Markets            1133.89    -0.71    -1.42
 MSCI LatAm                       2717.69    -0.94       -3
 Brazil Bovespa                  81320.79    -1.71     6.44
 Mexico IPC                      45591.92    -0.02    -7.62
 Chile IPSA                       5634.15     -0.3     1.25
 Chile IGPA                      28498.52    -0.15     1.85
 Argentina MerVal                30342.75    -2.09     0.92
 Colombia IGBC                   12042.16    -0.73     5.91
 Currencies                                daily %    YTD %
                                            change   change
 Brazil real                       3.6429     0.03    -9.05
 Mexico peso                      19.7570     0.09    -0.29
 Chile peso                        624.55    -0.10    -1.59
 Colombia peso                     2861.2    -0.33     4.22
 Peru sol                           3.272    -0.03    -1.07
 Argentina peso (interbank)       24.4500    -0.61   -23.93
 Argentina peso (parallel)          25.45    -0.20   -24.44
 (Reporting by Bruno Federowski
Editing by Alistair Bell)
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