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Chile expected to hold interest rates steady
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Turkish stocks fall ahead of Sunday's vote
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Latam stocks up 0.7%, currencies up 0.8%
(Updates prices throughout; adds stock moves, details,
comments)
By Amruta Khandekar and Ankika Biswas
May 12 (Reuters) - Chile's peso spearheaded the gains
among Latin American currencies on Friday ahead of a local
interest rate decision, while Turkish stocks declined in the run
up to Sunday's closely-watched presidential election.
The peso advanced 1.8% to an over three-month high,
with its central bank expected to maintain the country's
benchmark interest rate at 11.25% later in the day.
"We expect a rate hold, but think that the first cut may come at the June meeting ... the softer-than-expected, but still quite high, inflation print may see a less hawkish stance from the BCCh," Scotiabank's senior strategist Juan Manuel said in a note. MSCI's Latam currencies index rose 0.8% to its highest level since late 2014. The Brazilian real was up 0.2%. Data showed consumer prices in Latam's biggest economy continued to slow down in April, likely helping President Luiz Inacio Lula da Silva in his crusade against high interest rates. The Peruvian sol was down 0.2%, with the country's central bank saying that it is still too soon to "claim victory", despite easing inflation, a day after the central bank kept its benchmark interest rate unchanged at 7.75% for the fourth consecutive month. The Mexican peso slipped 0.1%. The country's industrial output fell more than expected, decreasing 0.9% in March from February, the national statistics agency said on Friday. Meanwhile, data showed that the Colombia's
industrial production contracted 2% year-on-year in March, in its first drop in more than two years, signaling a slowing economy, while
retail sales dropped 7.1% during the month.
The Colombian peso rose 0.9%.
Latam stocks gained 0.7% to a three-month high, with the benchmark index in Argentina jumping 1%. "Something that is comforting for us is that China is one of the few economies globally that have the levers on the fiscal and monetary side to be able to stimulate their economy and that is because inflation is at very low levels," said Kevin Ross, senior portfolio manager of international equities at Vaughan Nelson. Latam stocks were up 2.6% for the week, while currencies are set to mark their third straight week in the green, but some analysts have cautioned that assets in the region are losing their appeal among foreign investors. In Turkey, equities took a breather, falling 1.1% after a rally in the previous session following the withdrawal of presidential candidate Muharrem Ince from Sunday's vote- a move which was considered giving an edge to Kemal Kilicdaroglu, the main challenger of Turkish President Tayyip Erdogan. Further, Embraer SA gained 2.5% after the planemaker on Thursday announced a $5 billion plane sales deal with Berkshire Hathaway's NetJets. Brazilian food giant JBS SA slumped 6.1% on wider-than-expected first-quarter loss.
Key Latin American stock indexes and currencies at 1914 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 972.08 -0.59 MSCI LatAm 2311.11 0.74
Brazil Bovespa 108406.24 0.14
Mexico IPC 54876.31 -0.25
Chile IPSA 5589.05 -0.18 Argentina MerVal 316505.57 1.029
Colombia COLCAP 1154.78 0.99 Currencies Latest Daily %
change
Brazil real 4.9259 0.19
Mexico peso 17.5905 -0.10
Chile peso 781.5 1.83
Colombia peso 4559.5 0.90
Peru sol 3.6535 -0.23
Argentina peso (interbank) 229.2000 -0.09 Argentina peso (parallel) 469 1.28 (Reporting by Amruta Khandekar and Ankika Biswas; Editing by
Christina Fincher and Diane Craft)
