November 7, 2018 / 10:33 PM / 11 days ago

EMERGING MARKETS-LatAm stocks dip, weighed by profit-taking in Brazil

 (Recasts to focus on stock markets; new throughout)
    Nov 7 (Reuters) - Latin American stocks fell on Wednesday as
a drop in index heavyweight Brazil overwhelmed positive
performances in Mexico and Argentina, keeping the region from
following Wall Street's strong climb.
    MSCI's index of stocks in Latin America was
0.4 percent lower, weighed down by a 1.1 percent fall in
Brazil's Bovespa benchmark, which slipped further away
from an all-time peak reached on Monday.      
    The regional benchmark's decline came despite Mexican stocks
 gaining 1.3 percent while their Wall Street peers rose
more than 2 percent.
    Traders in Brazil were on the lookout for clarity about a
transition in government from current President Michel Temer to
President-elect Jair Bolsonaro, as well as the local earnings
season.
    Energy and logistics firm Cosan SA Industria e Comercio
 fell 4.1 percent, making it one of the benchmark's
top losers, after reporting a drop in quarterly profit.

    Brazil's real, meanwhile, firmed 0.8 percent, its
best performance in more than a week and a half.
    Temer and Bolsonaro met to discuss urgent economic reforms
and Temer invited his successor to accompany him to the G20
summit at the end of the month.
    On the whole, however, MSCI's index of Latin American
currencies edged lower as the U.S. dollar
recovered despite jitters following the U.S. congressional
mid-term election results.
    Profit-taking pulled Mexico's peso 0.8 percent lower.
The currency had firmed 3.2 percent in the four sessions through
Tuesday, after touching a four-month closing low last week. 
    The peso's recent weakness was prompted by incoming
President Andres Manuel-Lopez Obrador, known as AMLO, scrapping
an already started new airport project a after a public
consultation.
    Kenneth Lam, emerging markets FX strategist at Citigroup,
wrote that most investors are in "wait-and-see" mode regarding
Mexico.    
    "AMLO has promised greater use of 'public consultations'
which should generate more uncertainty, especially if it is ever
applied to the energy reform or other constitutional
amendments."
    Argentina's peso weakened about 0.4 percent, with
Fitch Ratings revising the country's rating outlook to negative
from stable. The ratings agency said the outlook change
reflected "sharply weaker economic activity."
    However, stocks on the country's benchmark MerVal index
 rose 1.4 percent amid slightly looser liquidity
conditions.
            
    Key Latin American stock indexes and currencies at 2203 GMT
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          997.92      0.57    -13.86
                                                  
 MSCI LatAm                    2719.61     -0.36     -3.84
                                                  
 Brazil Bovespa               87714.35     -1.08     14.81
                                                  
 Mexico IPC                   46917.40      1.27     -4.94
                                                  
 Chile IPSA                    5221.33     -0.01     -0.01
                                                  
 Argentina MerVal             31404.69      1.39      4.45
                                                  
 Colombia IGBC                12530.69      2.55     10.20
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.7322      0.16    -11.22
                                                  
 Mexico peso                   19.8700     -0.03     -0.86
                                                  
 Chile peso                        676      0.00     -9.08
                                                  
 Colombia peso                 3127.13      0.00     -4.64
 Peru sol                        3.362      0.00     -3.72
                                                  
 Argentina peso                35.6600     -0.03    -47.84
 (interbank)                                      
                                                  
 
 (Reporting by Aaron Saldanha in Bengaluru; Editing by Dan
Grebler)
  
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