By Ambar Warrick
April 8 (Reuters) - Brazil's real dipped on Wednesday, while
most other Latin American stocks and currencies treaded water as
a two-day rally was stymied by continued concerns over the
coronavirus outbreak.
The virus' death toll and spread continued to increase,
while its economic impact loomed over markets as more countries
impose lockdowns in a bid to stem its spread.
Emerging market risk assets were hit particularly hard by
the drop in risk appetite, with the MSCI's Latin American stocks
and currencies indexes now
trading just above multiyear lows.
For the day, the two indexes were flat.
"The stock market rallies of the past two days are despite
the fact that neither economic nor earnings data have really
begun to unveil the enormity of the economic crisis that the
world has been plunging into in the past few weeks," Rabobank
analysts wrote in a note.
Anticipation ahead of a key OPEC+ meeting on Thursday, which
is expected to result in major oil producers cutting production,
also kept markets on their toes. The minutes of the U.S. Federal
Reserve's meeting last month were also awaited.
"Today’s release of the minutes of the Fed’s March meetings
can be expected to display how panicked policy makers were last
month. This should be another sobering reminder of the enormity
of the current crisis," Rabobank analysts said.
The currencies of Mexico and Colombia, both
major oil exporters, inched higher on the prospect of a recovery
in oil prices.
Brazilian stocks rose about 0.2%, taking some
support from a stronger open on Wall Street.
Oil and gas heavyweight Petrobras was the biggest
boost to the Bovespa, adding more than 2.5% after it outlined
further cost cuts.
Roberto Campos Neto, the president of Brazil's central bank,
pledged aggressive intervention in foreign exchange markets to
prop up the real, which has lost nearly a third of its value
over the last quarter.
The real fell 0.4% on Wednesday.
Chile's peso rose 1%, while stocks in the country
traded sideways. Inflation in the 12 months to March
rose 3.7% in the country, but was within the central bank's
target range.
Key Latin American stock indexes and currencies at 1502 GMT
Stock indexes Latest Daily % change
MSCI Emerging Markets 872.21 -0.68
MSCI LatAm 1621.79 0.14
Brazil Bovespa 76718.75 0.47
Mexico IPC 34604.91 0.23
Chile IPSA 3723.35 0.31
Colombia COLCAP 1158.45 -0.43
Currencies Latest Daily % change
Brazil real 5.2369 -0.19
Mexico peso 24.2200 0.31
Chile peso 847 0.84
Colombia peso 3881.23 0.61
Peru sol 3.3618 0.03
Argentina peso 65.1500 -0.12
(interbank)
(Reporting by Ambar Warrick in Bengaluru; editing by Jonathan
Oatis)
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