Latam joins broader EM sell-off as growth, political worries sap risk appetite



By Susan Mathew

July 5 (Reuters) - Emerging market currencies were battered on Tuesday as the dollar reigned supreme, and a gauge of eastern European stocks slumped to an all-time low after a surge in European gas prices heightened global recession worries.

MSCI's index of emerging market currencies .MIEM00000CUS hit 20-month lows with resource-rich Latin America's currencies joining the sell-off.

Crude exporter Colombia's peso COP= hit an all-time low of 4,253.60, while top copper producer Chile's peso CLP= slumped to new lows of 946.20-a-dollar hit by falling prices of oil and the red metal respectively.

Mexico's peso MXN= and Brazil's real BRBY slumped 1.3% with the latter hitting five-month lows as May industrial output rose less than expected.

European gas prices surged after flows from Russia dipped and strikes at Norwegian oil and gas infrastructure added to concerns over supply, exacerbating fears over spiralling inflation and slowing economic growth.

"Slowdown fears are now arguably the main driver of currencies globally, perhaps even more so than central bank interest rate expectations," said Matthew Ryan, head of market strategy at global financial services firm Ebury.

Central and eastern European currencies tumbled against the dollar which surged as the euro tanked, while MSCI's index of eastern European stocks .MIME00000PUS dropped 4.8% - their worst session since early March.

The broader emerging market stocks index .MSCIEF extended losses to a fifth straight session.

After having hit 50 per dollar last week, Russia's rouble RUBUTSTN=MCX tumbled to around 61 per dollar, while Turkey's lira TRY= weakened more than 1%.

PINK TIDE WORRIES

Argentina's official peso ARS=RASL gave up another 0.2% after a turbulent Monday when investors fretted over policy implications after Silvina Batakis, widely viewed as close to the hard left-wing of the ruling Peronist coalition, was appointed as the new economy minister.

The country's popular black market peso had dropped about 8% on Monday.

Argentina is a top global exporter of soybeans, corn and wheat, and farm sector leaders in the country said they were worried about Batakis' close ties with Vice President Cristina Fernandez de Kirchner who pushed higher export taxes on agricultural goods when she was president from 2007-2015.

Latam bankers expect a drop in M&A and equity deals to intensify through the end of the year as Brazil goes through its presidential elections in October with leftist former President Luiz Inacio Lula da Silva ahead in polls.

Stocks in Latam also fell on Tuesday, with Mexico's IPC index .MXX sliding over 2%, while Argentina's Merval index .MERV recovered 2% after Monday's slip.

Key Latin American stock indexes and currencies at 1414 GMT: Stock indexes

Latest

Daily %

change MSCI Emerging Markets

988.33

-0.45 .MSCIEF

MSCI LatAm

1970.28

-3.24 .MILA00000PUS

Brazil Bovespa

96993.23

-1.64 .BVSP

Mexico IPC

47018.48

-2.12 .MXX

Chile IPSA

4947.18

-0.84 .SPIPSA

Argentina MerVal

90964.37

2.059 .MERV

Colombia COLCAP

1334.84

-1.7 .COLCAP

Currencies

Latest

Daily %

change Brazil real

5.3920

-1.26 BRBY

Mexico peso

20.5350

-1.34 MXN=D2

Chile peso

944.6

-1.91 CLP=CL

Colombia peso COP=

4251.05

-1.30 Peru sol

3.845

-0.78 PEN=PE

Argentina peso

126.2000

-0.18 (interbank) ARS=RASL


Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell

Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.

Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.

Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.

Gumagamit kami ng cookies para mabigyan ka ng mahusay na karanasan sa aming website. Magbasa pa o palitan ang iyong cookie settings.

Babala sa Risk: Maaaring malugi ang iyong kapital. Maaaring hindi nababagay sa lahat ang mga produktong naka-leverage. Mangyaring isaalang-alang ang aming Pahayag sa Risk.