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EM stocks on track for worst Feb since 2001
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Colombia's Petro says ministers of education, sports and
culture
to leave posts
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Brazil's Petrobras cuts gasoline, diesel prices
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Latam FX down 0.1%, stocks off 0.2%
(Adds comments, charts, details; updates prices)
By Amruta Khandekar and Bansari Mayur Kamdar
Feb 28 (Reuters) - Latin American stocks fell on Tuesday
and were set for their worst monthly performance in eight months
as fears of U.S. interest rates staying higher for longer
slammed risky assets, while Colombia's peso slid after President
Gustavo Petro announced a cabinet revamp.
The MSCI's index for Latin American stocks fell 0.2% by 1850 GMT and was headed for a monthly loss of 5.9%.
The broader emerging markets equities index slipped 0.4% and was down 6.6% this month, on track for its worst February performance since 2001. Brazilian equities slipped 0.1% on Tuesday, as shares of heavyweight state-run oil giant Petrobras slid 2.3%. Petrobras said it will reduce gasoline and diesel prices at its refineries from Wednesday, a move that will likely offset the resumption of federal taxes levied on fuels. Meanwhile, the Brazilian real fell 0.4% against a firm dollar, even as data showed the country's gross debt continued its downward trajectory in January, while the consolidated public sector recorded a strong primary surplus. The jobless rate in Latam's largest economy fell to 7.9% in the three months through December, statistics agency IBGE said, below market expectations. Currencies in the region slipped 0.2%, after being pressured last week as signs of sticky inflation in the U.S. drove up speculation of more interest rate hikes by the Federal Reserve, fuelling gains in the dollar . "This month was not so good in terms of risk sentiment. There was a sizable repricing in Fed hike expectations to now price in an additional three 25 bps hikes," said Juan Manuel Herrera, senior economist at Scotiabank.
The Colombian peso fell 2.0%, snapping four straight days of gains. "One of the primary drivers of the volatility in peso is the political risk associated with the Petro administration," said Brendan McKenna, international economist and FX strategist at Wells Fargo. "The selloff today is actually driven by some turnover in his cabinet... it just injects additional uncertainty into the Colombian policy platform that is going to be implemented." Data showed the country's urban jobless rate fell slightly to 14.5% in January from 14.8% in the same month of 2022. Chile's peso and the Peruvian sol rose 0.6% and 0.7% respectively, tracking copper prices higher as speculators adjusted positions on hopes for a demand revival in top metals consumer China. The Mexican peso also edged 0.2% higher. Mexican President Andres Manuel Lopez Obrador said his government had reached agreement with Tesla Inc over the company's plan to build a new plant. "The fact that there's this big project that's coming in from Tesla, it's good support for the view of investment in Mexico or the strength of the currency," Herrera said. Elsewhere, the National Bank of Hungary (NBH) left its base rate unchanged at 13% on Tuesday, as expected.
Key Latin American stock indexes and currencies at 1850 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 963.82 -0.35 MSCI LatAm 2196.60 -0.24 Brazil Bovespa 105586.85 -0.12 Mexico IPC 52713.36 -0.57 Chile IPSA 5391.42 0.64 Argentina MerVal 246774.86 -1.474 Colombia COLCAP 1200.17 -0.5 Currencies Latest Daily %
change
Brazil real 5.2183 -0.23
Mexico peso 18.3400 0.05 Chile peso 826.5 0.69
Colombia peso 4856.68 -2.03
Peru sol 3.7862 0.27
Argentina peso 197.1500 -0.17
(interbank) Argentina peso 371 1.62
(parallel) <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Latam stocks end Feb lower ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Amruta Khandekar and Bansari Mayur Kamdar
Editing by Bernadette Baum, William Maclean)
