NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

EMERGING MARKETS-LatAm stocks down for 4th straight session

Published 01/15/2010, 03:41 PM
Updated 01/15/2010, 03:48 PM

* LatAm stocks fall for 4th day, JPMorgan loan losses weigh

* Mexico holds rates, analysts see no change any time soon

* Argentina says received SEC response on swap plan

By Walter Brandimarte

SAO PAULO, Jan 15 (Reuters) - Latin American stocks slid for the fourth straight session on Friday while most currencies weakened in the region after JPMorgan reported deep losses on mortgage and credit card loans, frustrating investors who expected signs of improving U.S. credit conditions.

Mexican stocks slid more than 1 percent on the JPMorgan report, as investors feared weak credit conditions in the United States may delay a recovery in neighboring Mexico.

"This makes you think that we are not out of the crisis yet," said Carlos Alonso, a trader at brokerage Interacciones in Mexico City.

JPMorgan Chase & Co said it set aside $4.2 billion to cover mortgage losses in the fourth quarter, up $653 million from the same quarter a year earlier. Loan loss reserves in its commercial banking unit increased to $494 million from $190 million. For details, see [ID:nN15183524].

Cushioning the fall in Mexican stocks were growing bets the central bank, now under the realm of Agustin Carstens, will not raise interest rates before the second half of the year.

Such expectations grew after the central bank kept rates unchanged at 4.5 percent on Friday, saying weak economic growth would dampen the inflationary effects of recent tax hikes. [ID:nN15113109]

"The statement accompanying the decision boasts the stamp of the new governor, in our view," Barclays Capital analysts said, while changing their call for the beginning of monetary tightening in Mexico to August from March.

"This is interesting because it has the potential to lend credibility to the new governor, adding context to his earlier remarks, largely perceived as (too?) dovish," they added.

Mexico's benchmark IPC index <.MXX> lost 1.23 percent, while the Brazilian Bovespa index <.BVSP> declined 1.2 percent.

The MSCI stock index for Latin America <.MILA00000PUS> was 1 percent lower late on the day. It has declined more than 3 percent in four consecutive sessions of losses.

Most Latin American currencies also weakened. The Brazilian real ended 0.39 percent down at 1.773 per U.S. dollar. The Mexican peso slid 0.22 percent to 12.696 per greenback.

Meanwhile, a source with the Argentine Finance Ministry said the U.S. Securities and Exchange Commission has responded to the paperwork recently filed in connection to the country's planed swap of defaulted debt. [ID:nN15147840]

Argentina is preparing to reply to the SEC documentation, the source added.

Investors have become slightly more upbeat about the long-planned Argentine debt swap, despite a series of obstacles including a dispute with Central Bank Governor Martin Redrado and the embargo of an account held by the central bank with the New York Federal Reserve. (Additional reporting by Michael O'Boyle in Mexico City; Editing by Chizu Nomiyama)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.