EMERGING MARKETS-Latam stocks fall, Brazil's real set for worst week in a year

By Agamoni Ghosh and Sruthi Shankar

Nov 8 (Reuters) Brazil’s real led Latin American currencies lower on Friday, hit by underwhelming oil auctions and political concerns, while stocks in the region fell on doubts about an agreement between Washington and Beijing to roll back tariffs.

MSCI’s index of Latin American currencies .MILA00000CUS fell nearly 1% as most currencies were thwarted by a stronger dollar, with the real set for its worst week since August 2018.

The steep declines come after major global oil companies snubbed Brazil’s biggest-ever pre-salt oil auction earlier this week.

Adding to the real’s woes was a decision by the country’s Supreme Court that could lead to the release of former President Luiz Inacio Lula da Silva from prison, which could unite leftist forces against the right-leaning government in power.

“Lula may have the ability to unite the left side of the political spectrum, thus increasing opposition to fiscal reforms and austerity measures,” said Simon Harvey, FX analyst at Monex Europe.

If released, Lula, 74, would be free to engage in politics but not eligible under Brazil’s Clean Record law to seek elected office until 2025, eight years after his first conviction.

All other major Latin American currencies were also set to end the week lower with Chile’s peso CLP= headed for its third straight week of losses as the country reels with the after-effects of its worst domestic unrest since the South American nation’s return to democracy in 1990.

MSCI’s index of Latin American stocks .MILA00000PUS fell 1.6% with most indexes in the red as conflicting trade headlines kept investors on the back foot.

The Bovespa .BVSP fell 0.6% but still was on track to the end the week higher, helped by some upbeat earnings.

Chile’s SPIPSA index .SPIPSA bucked the gloomy trend to climb 0.3% higher, driven by shares of consumer-focused companies. Data showed consumer prices in the country rose 0.8% in October, slightly above market expectations.

Latin American stock indexes and currencies at 19:01 GMT

Stock indexes

Latest

daily % change

MSCI Emerging Markets .MSCIEF

1064.55

-0.84

MSCI LatAm .MILA00000PUS

2747.77

-1.75

Brazil Bovespa .BVSP

108444.72

-1.04

Mexico IPC .MXX

43744.56

-0.85

Chile SPIPSA .SPISA

4689.90

0.37

Argentina MerVal .MERV

34202.55

-4.646

Colombia IGBC .IGBC

13310.04

-1.21

Currencies

Latest

daily % change

Brazil real BRBY

4.1475

-1.31

Mexico peso MXN=D2

19.1001

0.07

Chile peso CLP=CL

746.3

-0.54

Colombia peso COP=

3336

-0.60

Peru sol PEN=PE

3.359

-0.48

Argentina peso (interbank) ARS=RASL

59.5000

0.17

(Reporting by Agamoni Ghosh and Sruthi Shankar)

((Agamoni.Ghosh@thomsonreuters.com; +918067491130; Reuters Messaging: Agamoni.Ghosh.thomsonreuters.com@reuters.net))

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