China cuts five-year loan prime rate
Brazil’s Carrefour up after Q4 results
Mexico’s Grupo Bimbo slides after Q4 profit drop
Stocks up 0.8%, FX adds 0.5%
By Shashwat Chauhan
Feb 20 (Reuters) –Currencies and stocks in resources-rich Latin America advanced on Tuesday, as a resurgent dollar took a breather, while a bigger-than-expected cut in China’s benchmark mortgage rate also aided sentiment.
By 9:59 a.m. ET (1459 GMT), MSCI’s gauge for Latin American currencies .MILA00000CUS gained 0.5%, touching its highest level in five weeks.
The dollar index =USD, which measures the greenback against a basket of major peers, eased 0.4% ahead of the release of minutes from the Federal Reserve’s latest policy meeting, due on Wednesday.
Global markets have been forced to re-assess the timing of U.S. interest rate cuts following stubbornly-high inflation data in the world’s biggest economy.
“Strong jobs and elevated inflation make it currently difficult to justify lowering policy rates and minutes out this week will likely stress that officials will be ‘careful’ in begging rate cuts,” Citi economists wrote in a note.
Aiding sentiment, top commodities consumer China announced its biggest ever reduction in the benchmark mortgage rate, as authorities sought to prop up the struggling property market and broader economy.
Brazil’s real BRL= rose 0.5% against the dollar, on track for its third straight session of gains, while the Mexican peso MXN= added 0.3%.
News out of China gave a leg up to copper prices, which helped the currency of the world’s biggest exporter of the red metal, the Chilean peso CLP=, rise 0.2% against the dollar. MET/L
Fellow copper producer Peru’s sol PEN= also advanced 0.1%, set for its fourth straight daily advance, while the Colombian peso COP= added 0.2% after falling nearly 0.3% in the previous session.
Latin American stocks .MILA00000PUS jumped 0.8%, scaling two-week highs as Brazil’s main stock index .BVSP gained 0.3%, lifted by rising financial shares.
Brazil’s Carrefour CRFB3.SA jumped 6.8% after the local arm of French retail giant Carrefour CARR.PA reported fourth quarter results.
Keeping gains in check, mining heavyweight Vale VALE3.SA dipped 2.6% tracking declining iron ore prices. IRONORE/
Stocks in Mexico .MXX were flat, while those in Colombia .COLCAP jumped 1.1% following a near 3% drop on Monday.
Mexican breadmaker Grupo Bimbo BIMBOA.MX fell 1.5% after reporting an 89% plummet in fourth quarter profit.
Argentina’s main stock index .MERV gained 1.0%, while Chilean stocks .SPIPSA dipped 0.2%.
Investors would also lookout for minutes from the Mexican central bank’s last policy meeting on Thursday, where the bank had held rates steady at 11.25%.
HIGHLIGHTS
** Morgan Stanley removes ‘dislike’ stance from Ecuador’s bonds
** Mexico’s Televisa spin-off Aguilas soars over 30% in market debut
Key Latin American stock indexes and currencies:
|
Stock indexes |
Latest |
Daily % change |
|
MSCI Emerging Markets .MSCIEF |
1019.88 |
0.34 |
|
MSCI LatAm .MILA00000PUS |
2585.13 |
0.78 |
|
Brazil Bovespa .BVSP |
129422.86 |
0.3 |
|
Mexico IPC .MXX |
57479.22 |
-0.02 |
|
Chile IPSA .SPIPSA |
6368.71 |
-0.22 |
|
Argentina MerVal .MERV |
1083086.08 |
1.01 |
|
Colombia COLCAP .COLCAP |
1233.13 |
1.05 |
|
Currencies |
Latest |
Daily % change |
|
Brazil real BRBY |
4.9295 |
0.63 |
|
Mexico peso MXN=D2 |
16.9977 |
0.25 |
|
Chile peso CLP=CL |
963.6 |
0.23 |
|
Colombia peso COP= |
3906.01 |
0.25 |
|
Peru sol PEN=PE |
3.7779 |
0.19 |
|
Argentina peso (interbank) ARS=RASL |
837.2000 |
-0.05 |
|
Argentina peso (parallel) ARSB= |
1090 |
1.83 |
Reporting by Shashwat Chauhan in Bengaluru; editing by Christina Fincher