Most Latam stocks set for worst quarter since March 2020

* EM stocks set for worst H1

* Colombia hikes by 150 bps to 7.5%

* Inflation in Brazil seen decelerating - central bank (Updates prices)

By Susan Mathew

June 30 (Reuters) - Latin American stocks fell on Thursday, with most marking their worst quarter since the pandemic-plagued first quarter of 2020, while a large interest rate hike by Colombia's central bank knocked local stocks to session lows.

Worries about the fallout from the conflict in Ukraine, and surging inflation causing aggressive central bank moves, have kept investors jittery so far this year.

"A deterioration in macroeconomic conditions is becoming more visible in emerging markets, raising the level of investor unease," said Alejo Czerwonko, chief investment officer, EM Americas, at UBS Global Wealth Management.

MSCI's index of emerging market stocks .MSCIEF is down about 19% since the beginning of the year, its worst first-half on record. Its currencies counterpart's 4% slide is its worst since the first six months of the pandemic ravaged 2020 .MIEM00000CUS .

But in the light of economic uncertainties, emerging market assets offer portfolios an inexpensive way to diversify compared with developed market assets, Czerwonko said.

"While U.S. stocks have only recently reached long-term valuation averages, emerging market equities are already trading at an 11x forward price-to-earnings ratio, well below their 10-year mean."

In Latam, stocks slipped, with Brazil's benchmark index .BVSP down 1.3%, as Wall Street looked to end the last session of one of its worst first halves in the red.

Over the quarter, Chile's index .SPIPSA was on track to end about 0.8% higher, outperforming not just regional peers, but broader emerging markets .MSCIEF whose quarterly losses were only topped by the slide in March 2020.

Colombia's index .COLCAP lost 0.7% on Thursday after the central bank raised interest rates by 150 basis points to 7.50%, as expected, as the battle against inflation continued.

In what could further bolster Colombia's currency COP= when it reacts to the decision on Friday, the bank raised its economic growth outlook for 2022 to 6.3%, from 5.0% previously.

Colombia's leftist President-elect Gustavo Petro picked market-friendly Jose Antonio Ocampo to be finance minister.

"It may be a positive thing for the country that Petro is choosing a very mixed cabinet. So that, in long term, will help the Colombian peso," Juan Perez, senior currency trader at Monex USA, said.

Brazil's real BRBY fell 0.8%. Its central bank expects 12-month inflation to decelerate to 11.31% in August from 11.73% in May, in line with its expectation that inflation will have peaked.

The real BRL= was on course for a near 10% quarterly slide, compared with a 1.4% slide in the Mexican peso MXN= .

Key Latin American stock indexes and currencies 1921 GMT: Stock indexes


Daily %

change MSCI Emerging Markets


-1.13 .MSCIEF



-0.88 .MILA00000PUS

Brazil Bovespa


-1.21 .BVSP

Mexico IPC


-0.33 .MXX

Chile IPSA


-0.76 .SPIPSA

Argentina MerVal


0.573 .MERV

Colombia COLCAP


-0.68 .COLCAP



Daily %

change Brazil real


-0.76 BRBY

Mexico peso


-0.16 MXN=D2

Chile peso


0.96 CLP=CL

Colombia peso COP=


-0.83 Peru sol


-1.12 PEN=PE

Argentina peso


-0.13 (interbank) ARS=RASL

Currencies in 2022 Link
EM stocks H1 Link

Reporting by Susan Mathew and Devik Jain in Bengaluru;
Editing by Nick Zieminski

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.