May 13, 2019 / 2:46 PM / 14 days ago

EMERGING MARKETS-Latam assets tumble as China raises tariffs on U.S. goods

    * China says tariffs on U.S. goods effective June 1
    * Trade fears wipe out EM currency index gains for 2019
    * Chilean stocks fall to lowest since December 2017  
    * Mexico's peso outperforms regional peers  

    By Agamoni Ghosh
    May 13 (Reuters) - Latin American currencies and stocks fell
on Monday after China said it will impose higher tariffs on a
range of U.S. goods in response to U.S. President Donald Trump
hiking tariffs on $200 billion worth of Chinese goods. 
    MSCI's index of Latin American stocks fell
nearly 2% after Beijing struck back.
    Currencies in the region also followed suit, with MSCI's
emerging market currency index wiping out all of
its 2019 gains on Monday as the tariff re-escalation rattled
global markets.
    Brazil's benchmark Bovespa index slumped more than
2%, led by losses in the financial sector, while the real
currency slipped about 1% to near its lowest since October 2018.
    Brazil's domestic outlook continued to darken, with the
central bank's weekly survey of nearly 100 financial
institutions showing the median 2019 growth forecast was trimmed
further to 1.45%. That is the bleakest outlook so far this year.

    Mexican stocks fell about 1% while the peso
outperformed their regional peers.
    Investors closely watched developments related to Pemex as
the government announced measures to help the state oil company,
including renewing credit lines with JP Morgan, HSBC and Mizuho,
as well as a gradual tax reduction for the firm.
    Cash-strapped Pemex has the largest debt among all state oil
firms in Latin America.
    Chile's peso fell over 1%, tracking a dip in the
price of copper, the country's top export, while stocks
on the IPSA index fell to their lowest since
December 2017. 
    Asset managers JP Morgan and UBS have reduced their exposure
to emerging market assets in recent days, while Citi said its
clients made record outflows on emerging market FX for a third
straight week.
    
    Key Latin American stock indexes and currencies at 1425 GMT

 Stock indexes                        daily %    YTD %
                             Latest    change   change
 MSCI Emerging Markets       1016.23    -1.67     7.02
                                               
 MSCI LatAm                  2593.60    -2.36     3.52
                                               
 Brazil Bovespa             92375.14       -2     5.11
                                               
 Mexico IPC                 42565.65    -1.88     2.22
                                               
 Chile IPSA                  4994.74    -1.11    -1.11
                                               
 Argentina MerVal           32541.56    -2.55     7.42
                                               
 Colombia IGBC              12517.16    -1.14    12.32
                                               
                                                      
 Currencies                           daily %    YTD %
                                       change   change
                              Latest           
 Brazil real                  3.9910    -1.19   -16.98
                                               
 Mexico peso                 19.1675    -0.38     2.77
                                               
 Chile peso                    694.1    -1.24   -11.45
                                               
 Colombia peso               3294.08    -0.67    -9.47
 Peru sol                      3.328    -0.39    -2.73
                                               
 Argentina peso              45.5500    -1.43   -59.17
 (interbank)                                   
                                               
 

 (Reporting by Agamoni Ghosh; Editing by Jeffrey Benkoe)
  
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