EMERGING MARKETS- Brazil’s real, Mexican peso outperform Latam FX; equities slide


By Sagarika Jaisinghani

Sept 29 (Reuters)The Brazilian real and the Mexican peso outperformed Latin American currencies on Tuesday following a slump in the past two sessions, while regional equities tracked a slide on Wall Street ahead of the U.S. presidential debate later in the day.

The real BRBY was up 0.2% by 1524 GMT, with the dollar slipping from recent two-month highs as investors held off on making big bets ahead of the first debate between U.S. President Donald Trump and Democratic challenger Joe Biden. FRX/

Brazil’s real has fallen to record lows this year due to the economic fallout from the COVID-19 pandemic, although a string of recent data has raised hopes that Latin America’s largest economy could return to growth next year.

Investor sentiment has also been subdued by concerns around the government’s plans to fund a new minimum income program called Renda Cidada, which translates as “Citizen Income”.

“The market is still digesting the news of the Citizen Income financing and will be waiting for some explanation from the government” on how to reconcile this spending with an already tight budget, said Victor Beyruti, economist at Guide Investimentos.

The Mexican peso MXN= gained 0.3%, snapping a two-day losing streak, while the country’s stock index .MXX fell half a percent with financials and consumer staples stocks leading declines.

Samuel Bentley, a client portfolio manager at fund house Eastspring Investments, told the Reuters Global Markets Forum that broad weakness in emerging stocks had created value opportunities and that his fund was considering increasing exposure to Mexico, among other countries.

The Chilean peso CLP= eased 0.2% and was on course for its second straight monthly decline, while the Peruvian sol PEN= and Colombian peso COP= shed about 0.1% each.

A basket of Latin American equities .MILA00000PUS tumbled 0.8% in its second consecutive day of losses. The index is also set for its biggest monthly percentage decline since the coronavirus-driven crash in March.

Bourses in Chile .SPIPSA, Argentina .MERV and Colombia .COLCAP shed between 0.4% and 1.3%, while the Brazilian stock index .BVSP edged 0.1% higher.

U.S. private equity firm Advent International said on Tuesday it had raised a $2 billion fund to invest in Latin American companies, its seventh fund focused on the region, hoping to target assets made cheaper by depreciation in local currencies.

Key Latin American stock indexes and currencies at 1524 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1069.77

-0.01

MSCI LatAm .MILA00000PUS

1810.58

-0.76

Brazil Bovespa .BVSP

94537.34

-0.14

Mexico IPC .MXX

37023.29

-0.56

Chile SPIPSA .SPIPSA

3550.53

-1.25

Argentina MerVal .MERV

41862.72

-0.511

Colombia Colcap .COLCAP

1172.41

-0.36

Currencies

Latest

Daily % change

Brazil real BRBY

5.6507

-0.29

Mexico peso MXN=D2

22.3890

0.03

Chile peso CLP=CL

786.4

-0.25

Colombia peso COP=

3873.15

-0.05

Peru sol PEN=PE

3.593

-0.12

Argentina peso (interbank) ARS=RASL

76.1100

-0.07

(Reporting by Sagarika Jaisinghani in Bengaluru; additional reporting by Luana Maria Benedito in Sao Paulo, Aaron Saldanha in Gurugram and Divya Chowdhury in Mumbai Editing by Alistair Bell)

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