Home Markets EMERGING MARKETS-Colombian stocks, peso weigh on Latam assets

EMERGING MARKETS-Colombian stocks, peso weigh on Latam assets

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* Colombia’s peso extends losses after c.bank hike on Friday * Chile unemployment rate hits 7.9% in quarter through December * Latam stocks down 0.4%, currencies fall 0.2% (Updates prices, adds comment) By Bansari Mayur Kamdar and Amruta Khandekar Jan 30 (Reuters) – Colombian stocks and the peso fell sharply on Monday, extending declines after the country’s smaller-than-expected rate hike last week, while a rout in Adani Group companies after a short-seller attack weighed on broader emerging market equities. The MSCI’s index for Latam stocks was down 0.4% at 1921 GMT alongside a 0.8% slide in the broader EM stocks index. “It’s a combination of some profit taking after very strong outperformance (in EM) since the start of the year and ahead of the Fed meeting later this week,” said Michael Wang, deputy portfolio manager at Mirabaud Asset Management. Globally, risk sentiment suffered a setback on Monday with investors cautious ahead of a flurry of widely expected interest rate hikes, including from the U.S. Federal Reserve in the coming days. Weighing on broader emerging market equities, most Adani Group shares extended sharp losses after the Indian conglomerate’s rebuttal of a U.S. short-seller’s criticism failed to pacify investors. The currencies index in Latin America was down 0.2%, with the Colombian peso down 2.2% against the dollar and on track for its biggest one-day percentage decline since mid-October last year. The peso had also fallen 0.5% on Friday after Colombia’s central bank board raised the benchmark interest rate by 75 basis points to 12.75%, a softer increase than expected by a majority of analysts. “Overall, the currency has been one of the worst-performing ones of the year with government policy seeming to lean less towards funding big industry and taking control over public services,” said Juan Perez, director of trading at Monex USA. Colombian stocks fell 1% to hit their lowest in over three weeks. Currencies of copper producers Chile and Peru fell 0.3% and 0.5%, respectively, as worries about the outlook for copper demand in top consumer China dominated sentiment. Chile’s unemployment rate hit 7.9% in the October-December period, government statistics agency INE said, matching economists’ forecasts in a Reuters poll and unchanged from the quarter through November. The Brazilian real and the Mexican peso were flat. Mexico’s economy likely grew between 2.9% and 3% in 2022, the country’s Deputy Finance Minister Gabriel Yorio told a news conference on Monday, marking a slowdown from the 5% advance recorded in 2021. Brazil’s government debt as a share of gross domestic product ended 2022 at its lowest level in more than five years, central bank data showed, helped by nominal economic growth and net public debt redemptions. Elsewhere, Nigeria’s government bonds fell heavily after ratings agency Moody’s downgraded the West African oil producer late on Friday to Caa1 from B3, saying the government’s fiscal and debt position was expected to keep deteriorating. Key Latin American stock indexes and currencies at 1921 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1043.19 -0.76 MSCI LatAm 2316.01 -0.36 Brazil Bovespa 112321.92 0.01 Mexico IPC 54584.99 -0.35 Chile IPSA 5337.43 -0.26 Argentina MerVal 247705.64 -2.591 Colombia COLCAP 1272.87 -1.01 Currencies Latest Daily % change Brazil real 5.1105 0.02 Mexico peso 18.7651 -0.03 Chile peso 807.5 -0.26 Colombia peso 4652.15 -2.17 Peru sol 3.8378 -0.49 Argentina peso 186.5600 -0.50 (interbank) Argentina peso 379 1.85 (parallel) (Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Nick Macfie and Philippa Fletcher)

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