June 23, 2011 / 4:06 PM / 7 years ago

EMERGING MARKETS-Latam stocks, FX hit by global slowdown concern

 * Europe activity data, Fed outlook hits risk appetite
 * Regional currencies weaken on flight to U.S. dollar
 * Rise in US jobless claims reinforces Fed gloom
 * Mexico's IPC and Chile's IPSA both down nearly 1 pct
 * Brazil markets closed for holiday
 By Brad Haynes
 SANTIAGO, June 23 (Reuters) - Latin American markets slid early on Thursday after signs of weaker growth in Europe and China added to a downbeat outlook from the U.S. Federal Reserve to reinforce concerns of a global slowdown.
 The U.S. Federal Reserve on Wednesday said the pace of recovery in the world's largest economy was proceeding more slowly than expected but offered no new stimulus measures. [ID:nN1E75M0FG]
 Weak U.S. jobless claims data on Thursday backed up the Fed's pessimistic view. Adding to the malaise was a sharp drop in oil. For details see [ID:nLDE75M1BR] [O/R].
 The Mexican peso MXN= lost 0.9 percent and Chile's currency weakened 0.5 percent CLP=CL to a one-month low as the U.S. dollar surged against a basket of global currencies .DXY on a bid for safe haven assets.
 The MSCI Latin American index .MILA00000PUS edged down 0.8 percent in early trade, compared to a 2.1 percent plunge on global bourses .MIWD00000PUS.
 A market holiday in Brazil limited losses in the region, but Latin America's place on the margin of global woes may also explain the defensiveness of bourses in Mexico and Chile.
 "These countries are definitely better positioned than many in Europe and in some cases versus the United States as well," said Kathryn Rooney Vera, an emerging markets strategist with Bulltick Capital Markets.
 A decade of economic reforms has many thinking Latin American currencies and assets could now hold up better in the face of investor panic than they did in the wake of the 2008 U.S. financial crisis. [ID:nN1E75J0GH]
 Mexico's IPC stock index .MXX was down 0.8 percent, dropping for the second time in a week from a strengthening resistance level around 35,500 points.
 Shares of America Movil (AMXL.MX), one of the world's biggest telecommunications companies, fell 0.8 percent from a three-week high.
 Chile's IPSA index .IPSA shed 0.9 percent, snapping a four-day bounce and reinforcing a month-long downtrend as its slow stochastics, an oscillating technical indicator, edged into overbought territory.
 Volatile shares of retailer La Polar LAP.SN showed the only gains on the index, rising 17 percent after shareholders approved a $200 million capital increase to help the company weather a credit scandal that has hammered the stock. [ID:nN1E75M0HM]
 Leading rivals Falabella FAL.SN and Cencosud CEN.SN lost 1.3 percent and 2.5 percent respectively, showing lingering unease in retail stocks as authorities investigate lending practices in the sector. [ID:nN1E75J09R]   

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