August 19, 2019 / 7:32 PM / 2 months ago

EMERGING MARKETS-Latam stocks rise on hopes of stimulus; currencies fall

 (Updates prices, adds market strategist's quote)
    * Mexico stocks rise on hopes of pipeline deal
    * Brazil's real hits 3-month low 
    * Argentine markets shut for holiday 

    Aug 19 (Reuters) - Latin American stocks broadly rose on
Monday as signs of stimulus for major economies lifted global
sentiment, while currencies in the region were dented by a
stronger dollar. 
    Stocks in Mexico led the charge climbing 0.6% as a
rebound in global equities from a brutal sell-off last week and
news of a deal to resolve a pivotal pipeline dispute in the
country provided some relief to investors.
    Mexican President Andres Manuel Lopez Obrador said on Monday
that his government is close to an accord over a contractual
dispute with the builders of several gas pipelines, heralding a
solution to a case that has sapped investor confidence in
Latin-America's second-largest economy.
    Stock indices in Chile and Colombia also
rose as equities worldwide came off a rough week, marked by
worries about an escalation in the U.S.-China trade war, global
economic slowdown fears and turmoil in Argentine markets.
    Brazil's Bovespa was the only laggard, sliding 0.5%
weighed down by financials. 
    Currencies in the region weakened with the real
hitting a three-month low, as investors speculated about the
path of U.S. interest rates ahead of Federal Reserve Chairman
Jerome Powell's speech at an annual meeting of central bankers
in Jackson Hole later this week. 
    Chile's peso fell 0.7% after central bank data showed
the country's gross domestic product grew 1.9% in the
second-quarter of 2019 as slumping global trade and falling
copper prices continue to take their toll.
    "Although Chile's external account imbalance has widened
slightly, relative to the past few years, it remains moderate,
well financed, and is not a source of concerns for investors,"
said Credit Suisse analysts in a note. 
    Chilean officials have been downgrading expectations for
growth for months amid a mining slump that has dragged on
exports from the world's top copper producer.            
    Markets in Argentina were closed for a local holiday, but 
investors will be watching out for signs of further weakness
when markets open for trading after ratings agencies Fitch and
Standard & Poor's downgraded Argentina's sovereign debt rating. 
    Argentine markets have collapsed since last week's primary
vote saw opposition candidate Alberto Fernandez trouncing
business friendly President Mauricio Macri.
    The cost of insuring against an Argentine sovereign default
rose after Fernandez said the country would struggle under
present conditions to repay a loan to the International Monetary
Fund.     
    
  Key Latin American stock indexes and currencies at 1905 GMT
 
 Stock indexes                                 daily % change
                          Latest            
 MSCI Emerging Markets              976.39               0.63
                                            
 Brazil Bovespa                   99007.08               -0.5
                                            
 Mexico IPC                       39562.80               0.67
                                            
 Chile IPSA                        4811.70               0.27
                                            
 Argentina MerVal                        -                  -
                                            
 Colombia IGBC                    12527.47                1.1
                                            
                                                             
 Currencies                                    daily % change
                                    Latest  
 Brazil real                        4.0605              -1.42
                                            
 Mexico peso                       19.8040              -0.78
                                            
 Chile peso                          712.9              -0.58
                                            
 Colombia peso                        3435              -0.05
 Peru sol                            3.386              -0.24
                                            
 Argentina peso                          -                  -
 (interbank)                                
                                            
 

 (Reporting by Agamoni Ghosh and Sruthi Shankar in Bengaluru;
Editing by Nick Zieminski)
  
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