Geopolitical woes rattle Russian, European markets; Latam FX up

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  • Rouble marks worst day in 15 months
  • Eastern European stocks tumble
  • Brazil's real at near 2-month high

Jan 13 (Reuters) - Russia's rouble plummeted on Thursday and European markets tumbled as tensions ramped up between Moscow and Washington, while Latin American currencies rose against a weaker dollar.

The rouble slumped 2.5%, marking its worst day in 15 months after the Kremlin said talks with the United States and NATO this week had been "unsuccessful" in bridging fundamental differences over the Ukraine crisis and Moscow's demands that NATO pull back from central and eastern Europe. read more

The United States said it had largely settled on the options for sanctions against Russia should it invade Ukraine and would be prepared to impose them as soon as any tanks roll.

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Russian stocks (.IMOEX) sank 4%, while MSCI's index of eastern European equities (.MIME00000PUS) dropped 4.4%. Poland's foreign minister warned that Europe was at risk of plunging into war over the Ukraine issue. read more

RUB underperforms EM as geopol tensions rise

In Latin America, Brazil's real , rose 0.4% to near two-month highs, with data showing Brazil's services activity returned to positive territory in November with a much stronger-than-expected gain.

But with weaker-than-expected industrial production and civil construction inputs, Citigroup strategists now expect fourth-quarter Gross Domestic Product to contract. Tighter monetary policy and rising Omicron cases are also expected to cause a contraction in 2022 annual GDP.

With the dollar taking a hit as speculation about tighter U.S. monetary policy eased, most other Latam currencies traded steady to higher with Colombia's peso hitting one-month highs.

Among stocks, Brazilian meatpackers BRF (BRFS3.SA), Marfrig (MRFG3.SA) and JBS (JBSS3.SA) jumped between 1.8% and 5%. BRF signed a memorandum of understanding with Saudi Arabia's sovereign fund to create a joint venture to make poultry products in the Middle Eastern country. read more

Miner Vale (VALE3.SA) slid 1% as iron ore prices dipped on demand uncertainty. JPMorgan sees cost inflation ruling miners' earnings in the second half of 2022, and expects Rio Tinto (RIO.L), BHP (BHP.AX) and Vale to retain conservative guidance, and supply to remain tight in 2022.

In Argentina, inflation likely rose back up to 3.6% in December, a Reuters poll showed, which would be the highest level since last April. The country's central bank recently hiked the benchmark interest rate to 40%, its first increase in over a year.

Elsewhere, China Evergrande Group's (3333.HK) main unit Hengda Real Estate Group has reached an agreement with bondholders to delay payments for a 4.5 billion yuan ($707.5 million) onshore bond, Hengda said in a filing on Thursday. read more

Key Latin American stock indexes and currencies:

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Reporting by Susan Mathew in Bengaluru; Editing by Mark Potter and Richard Chang

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