July 2, 2018 / 2:47 PM / 3 months ago

EMERGING MARKETS-Mexican stocks, peso fall as leftist elected president

    SAO PAULO/MEXICO CITY, July 2 (Reuters) - The Mexican peso
and stock market both fell over 1 percent on Monday after
leftist presidential candidate Andres Manuel Lopez Obrador
handily won election while his allies picked up a significant
number of congressional seats.
    The 64-year-old former Mexico City mayor on Sunday won with
the widest margin in a presidential election since the 1980s,
according to an official quick count that showed him taking more
than half the vote - some 30 points ahead of his nearest rival.

    His government could usher in greater scrutiny of foreign
investment, and his long-running lead in the polls was a
constant concern for investors and traders.
    Mexico's benchmark IPC equities index had fallen 1.31
percent in morning trade, while the peso currency
dropped 1.02 percent.
    The market is now closely watching Lopez Obrador for policy
signals, said Marco Oviedo, an economist at Barclays Bank. Many
of his future policy decisions remain something of a mystery, as
he ran a campaign that some saw as fairly light on actionable
specifics.
    The peso has been extremely volatile over the last day or
so, and on Sunday night it strengthened significantly, as
traders had priced in a Lopez Obrador win and his opponents
conceded defeat in a prompt and orderly manner. Those gains were
effectively erased on Monday as traders walked back those gains.

    Also, saving the peso and equities from a total rout on
Monday were a number of early statements by the election winner,
saying he would respect central bank independence and ongoing
North American Free Trade Agreement negotiations, among other
measures.
    "The conciliatory tone of Andrés Manuel López Obrador (AMLO)
after his convincing victory in the presidential elections has
been relatively well received by the markets," said Capital
Economics in a report. 
    "But it's worth warning that we still have little clarity
about his economic policies."   
    
Key Latin American stock indexes and currencies at 1418 GMT: 
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1057.33     -1.14     -7.68
                                                  
 MSCI LatAm                    2419.75     -2.31    -12.41
                                                  
 Brazil Bovespa               72293.93     -0.64     -5.38
                                                  
 Mexico IPC                   47040.48     -1.31     -4.69
                                                  
 Chile IPSA                    5301.25      0.83     -4.73
                                                  
 Chile IGPA                   26843.21      0.73     -4.07
                                                  
 Colombia IGBC                12499.63      1.49      9.93
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.9056     -0.76    -15.17
                                                  
 Mexico peso                   20.1200     -1.02     -2.09
                                                  
 Chile peso                     653.05      0.00     -5.88
                                                  
 Colombia peso                 2929.25      0.00      1.80
                                                  
 Peru sol                        3.288     -0.36     -1.55
                                                  
 Argentina peso                28.8000      0.52    -35.42
 (interbank)                                      
                                                  
 Argentina peso                  28.85     -2.43    -33.34
 (parallel)                                       
                                                  
 

 (Reporting by Gram Slattery, Noé Torres, Sheky Espejo, and
Mexico City bureau
Editing by Alistair Bell)
  
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