EMERGING MARKETS-Most Latam stocks fall, FX awaits Fed outcome

 (Recasts throughout, updates prices)
    By Susan Mathew
    March 19 (Reuters) - Most Latin American stocks fell on
Tuesday as investors digested mixed signals regarding the
progress in U.S.-China trade negotiations, while regional
currencies awaited the outcome of a U.S. Federal Reserve meeting
for a clear direction.
    While U.S. President Donald Trump said that trade talks with
China were going "very well," Bloomberg reported that some U.S.
officials are concerned that China is pushing back against
American demands in trade negotiations.

    Uncertainties surrounding the bruising trade war have seen
investors jettisoning riskier emerging market assets for safer
assets of the developed world. 
    Brazil's Bovespa stock index retreated from two days
of hitting all-time highs to close 0.4 percent lower, but losses
were capped by gains in iron ore miner Vale and
state-oil firm Petroleo Brasileiro SA.

    Investors were also watchful of headlines from a meeting
between President Jair Bolsonaro and Trump in Washington. Trump
said he told Bolsonaro he would designate Brazil a major
non-NATO ally and possibly go further by supporting a campaign
to make Brazil "maybe a NATO ally."
    Argentina's Merval index dropped 1.6 percent, while
stocks in Chile shed 0.35 percent and clocked their
biggest one-day fall in more than two weeks.  
    Mexican stocks, which resumed trade after a three-day
weekend, rose 0.4 percent. Telco America Movil was up
0.6 percent after the company said it will acquire 100 percent
of Nextel's Brazil operations.
    Among regional currencies, Mexico's peso rose 0.25
percent and extended gains to a third straight session, while
Brazil's real rose to its highest in two and half weeks
before paring most gains to finish marginally higher. 
    Expectations that the Fed will reaffirm its dovish stance
and prove accommodative after its meeting this week weighed on
the dollar.
    But, "the risk will be if they aren't as dovish as expected.
Then we will see a big sell-off in the EM space," said Christian
Lawrence, senior market strategist, LatAm FX at Rabobank.
    A rate decision by Brazil's central bank is also awaited on
Wednesday, with a Reuters poll showing the bank standing pat on
interest rates for the rest of the year. This will be the first
rate decision under new central bank chief Roberto Campos Neto.

    But, "an overly dovish sounding central bank may hinder the
real," wrote Sacha Tihanyi, deputy head of emerging markets
strategy at TD Securities in a note.
    The Argentine peso fell 0.8 percent, while Chile's
peso slipped 0.3 percent. 
    Key Latin American stock indexes and currencies at 2100 GMT:
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1070.95      0.16
 MSCI LatAm                    2894.65      0.71
 Brazil Bovespa               99588.37     -0.41
 Mexico IPC                   42378.61       0.4
 Chile IPSA                    5305.72     -0.35
 Argentina MerVal             34373.20     -1.62
 Colombia IGBC                13168.40      0.46
       Currencies             Latest    Daily %
 Brazil real                    3.7885      0.05
 Mexico peso                   19.0139      0.19
 Chile peso                      666.8     -0.15
 Colombia peso                  3096.3      0.07
 Peru sol                        3.298      0.03
 Argentina peso                40.5000     -1.01
 (Reporting by Susan Mathew and Agamoni Ghosh in Bengaluru;
Editing by Alistair Bell)

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