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Latin American currencies up 0.6%, stocks rise 2%
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Brazilian financial companies lead equity gains
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Brazil's IGP-10 price index up 0.05% in March
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Argentina hikes interest rate by 300 basis points
(Adds comments, details; updates prices throughout)
By Ankika Biswas and Bansari Mayur Kamdar
March 16 (Reuters) -
Most Latin American currencies and stocks gained on Thursday as a lifeline from the Swiss National Bank to Credit Suisse helped ease fears of a global banking crisis and boosted appetite for riskier assets. The MSCI index for Latam currencies was up 0.6% by 3:20 p.m. EDT (1920 GMT), while the broader stocks gauge jumped 1.9%, with both on track to snap five-day losses and log their best one-day gain in more than a week. Some investor nerves over a banking crisis were soothed as Credit Suisse announced that it would borrow up to $54 billion from the Swiss National Bank to shore up liquidity, and Reuters reported that several large banks are in talks to deposit billions of dollars in embattled First Republic Bank .
"Today we've essentially seen a bit of stabilization," said
Christian Lawrence, senior market strategist at Rabobank.
"We are not out of the woods yet ... we could easily see the
buying reverse if we see some more negative headlines around the
overall health of the financial system."
Bank shares supported a nearly 1% gain in Brazil's
Bovespa equities index , with Itau Unibanco PN and Bradesco PN rising 1.4% and 2.7%, respectively.
"Latin America's financial institutions have limited
direct exposure to the three banks, as well as to fintechs and
cryptoasset companies," analysts at Moody's noted.
Latin American banks maintain high volumes of liquid assets that are mostly comprised of investments in domestic government securities, they said.
Benchmark indexes in Mexico , Colombia and Argentina gained between 1% and 5.7%.
Ratings agency S&P Global also said that banks around the
world that take part in its credit reviews should be able to
handle "unrealized losses" from rising interest rates.
Peru's sol , Colombia's peso , Mexico's peso and Brazil's real were up between 0.3% and 1%,
also supported by a weak dollar, which was down 0.1%.
However, Chile's peso bucked the trend with a 0.4% decline.
Meanwhile, Latin American and Caribbean leaders are set to discuss
cutting trade tariffs to forge a plan to combat inflation, Mexican President Andres Manuel Lopez Obrador said.
Colombia's government is expected to present a labor reform bill to Congress on Thursday that would reduce working hours and boost overtime pay, but critics say the measures could hurt job creation. On the data front, Brazil's inflation, as measured by the IGP-10 price index, rose 0.05% in March, versus a 0.02% increase in February. On the other hand, Argentina's central bank decided to hike its benchmark interest rate by 300 basis points to 78%, Reuters reported, after the South American nation's annual inflation rate hit 100% for the first time in more than three decades.
Key Latin American stock indexes and currencies at 1920 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 943.25 -0.38 MSCI LatAm 2119.25 1.86
Brazil Bovespa 103607.94 0.91
Mexico IPC 52626.05 1.04
Chile IPSA 5197.37 -0.01 Argentina MerVal 221845.47 5.729
Colombia COLCAP 1131.15 1.74 Currencies Latest Daily %
change
Brazil real 5.2428 0.97
Mexico peso 18.7567 1.07
Chile peso 824 -0.42
Colombia peso 4827.5 0.73
Peru sol 3.78 0.34
Argentina peso (interbank) 292.9300 -30.85 Argentina peso (parallel) 379 0.00 (Reporting by Bansari Mayur Kamdar and Ankika Biswas in
Bengaluru; Editing by Shilpi Majumdar and Paul Simao)
