Latam assets up; Brazil gains on OPEC membership talks

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Brazilian stocks and the real led gainsacross Latin America on Wednesday as the country looks to startdiscussions on joining OPEC, while most regional assets roseamid waning concerns over a Chinese virus. Brazilian Energy Minister Bento Albuquerque said Brazil willbegin talks on joining the Organization of the PetroleumExporting Countries when he visits Saudi Arabia in July. The country, whose crude production has expanded rapidly,would likely have to comply with OPEC supply curbs. Brazil isalso poised to sign supply deals with India, one of the largestoil importers in the world. The real strengthened 0.6% to the dollar, while SaoPaulo stocks rose 0.6%. However, shares of state-run oilfirm Petrobras fell slightly. Across Latin America, stocks and currencies rose slightly,tracking a recovery in global risk assets amid hopes that thespread of a new flu-like virus in China would be contained. MSCI’s index for Latin American equitiesrose 0.9%, a day after its biggest daily decline in nearly twomonths. The currencies index was about 0.4%higher. Fears over economic disruptions by the Chinese virus hadrattled global markets on Tuesday, althoughanalysts downplayed the likely impact. “The spread of a new coronavirus across Asia and into theU.S. is clearly a major public health concern, but we suspectthat its economic effects will be modest,” said JenniferMcKeown, head of global economics at Capital Economics. “Even the significant economic disruption related to SARSturned out to be temporary and experts expect this disease to beless deadly and better contained.” The Argentine peso was largely flat, while stocks rose slightly as the provincial government in BuenosAires was forced to extend a deadline for creditors to agree orreject a plan to delay a $250 million bond repayment originallydue on Jan. 26. Argentine sovereign and provincial bonds fell after theextension, reflecting broader concerns over the countrydefaulting on its debt obligations. The Argentine peso had crashed last year due to the sameconcerns, and was among the worst performing emerging marketcurrencies in 2019. The Chilean peso firmed against the dollar afterdeputy central bank governor Joaquin Vial promised interventionif violent protests threatened the currency again. Vial alsoexpressed hope that relative calm in recent weeks would beenough to keep the country out of recession. Violent protests in the country last year had drasticallyundercut the peso and prompted central bank intervention tostabilize the currency. Key Latin American stock indexes and currencies at 1915 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1133.85 0.6212 MSCI LatAm 2904.15 0.9 Brazil Bovespa 117780.25 0.64 Mexico IPC 45722.45 0.19 Chile IPSA 4669.98 -0.51 Argentina MerVal 41750.99 0.639 Colombia COLCAP 1652.09 -0.08 Currencies Latest Daily % change Brazil real 4.1812 0.58 Mexico peso 18.6830 0.43 Chile peso 770.3 0.38 Colombia peso 3329.5 0.72 Peru sol 3.313 0.12 Argentina peso 60.0700 0.05 (interbank) (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru;Editing by David Gregorio and Matthew Lewis)

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