* Political noise rattles Argentine markets
* Brazil inflation forecast raised sharply
* Mexican stocks buck sell-off
* Brazil's Log-In Logistica jumps on controlling stake bid
By Susan Mathew
Sept 16 (Reuters) - Emerging market currencies took a hit on
Thursday as surprisingly chipper U.S. retail sales data sent the
dollar rising, while stocks followed global markets into the red
on China woes.
Brazil's real led the charge in Latin America, losing
0.5%. The Economy Ministry sharply raised its forecasts for
inflation measured by the IPCA consumer price index to 7.9% this
year, from 5.9% previously.
The central bank's hiking cycle to control inflation has
helped the currency from a spiral as the political backdrop
becomes cloudier going into 2022 elections.
"The environment for the real is likely to remain difficult;
among other things, domestic factors such as President Jair
Bolsonaro's unsteady policies limit the real's appreciation
potential," said Alexandra Bechtel, an FX and EM analyst with
Commerzbank.
Brazil's federal electoral court said it is set to probe the
funding of last week's rallies in support of Bolsonaro, who is
down in the polls as citizens grew disillusioned by his handling
of the pandemic which also threw up allegations of corruption.
Political ructions rattled Argentina as well after Interior
Minister Eduardo de Pedro offered his resignation along with
several other hard-left officials, signalling a rift within the
ruling coalition after a bruising primary election loss.
Argentine stocks dropped 2.5%, on course for their
sharpest one-day loss in 12 weeks. Argentine markets had
welcomed a lead for the conservative opposition in mid-terms
primaries earlier this month.
Argentina's economy is predicted to grow 4% in 2022, while
inflation is expected to hit 33%, according to a draft budget
released overnight. The government has struggled with runaway
inflation, currently at 51.4%, and debt restructuring.
Most other Latam currencies fell as the dollar was lifted
following upbeat U.S. retail sales data, But separate data
showed weekly jobless claims rose. All eyes are on the U.S.
Federal Reserve's stance next week.
EM stocks fell 1%, on course for their worst
session in four weeks, tracking Wall Street and dented by
worries over weak data from China and Beijing's increasing
crackdowns on businesses.
China is a major destination for Latam's basic material
exports.
Brazil's Bovespa equity index dropped 1.3% extending
losses to a third straight session, weighed the most by miner
Vale as iron ore prices fell.
But Brazilian logistics company Log-In Logistica Intermodal
soared 37% after Swiss shipping group MSC made an
unsolicited offer to buy a controlling stake of up to 67% in it.
But Mexico's IPC index bucked the trend, up 0.7% led
a 8% jump in utility Grupo Carso.
Key Latin American stock indexes and currencies at 1425 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1275.13 -1.05
MSCI LatAm 2377.78 -0.98
Brazil Bovespa 113584.27 -1.28
Mexico IPC 52192.33 0.73
Chile IPSA 4418.20 -0.35
Argentina MerVal 76541.75 -2.48
Colombia COLCAP 1319.08 -0.23
Currencies Latest Daily %
change
Brazil real 5.2638 -0.53
Mexico peso 19.9346 -0.40
Chile peso 780.4 -0.38
Colombia peso 3822.53 -0.26
Peru sol 4.106 -0.16
Argentina peso 98.2800 -0.02
(interbank)
(Reporting by Susan Mathew in Bengaluru;
Editing by Marguerita Choy)
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