Latin American equity markets ended mixed on Friday as rising prices of raw materials supported shares of some commodity-exporter companies but lingering recession fears weighed on the broader market. Most Latin American currencies recovered from recent losses following a series of central bank actions across the region.
A $2 rise in US crude prices boosted shares of Brazilian oil firm Petrobras, as well as sovereign bonds issued by Venezuela, which heavily relies on oil exports. Shares of other raw-material exporters also rose as the Reuters-Jefferies CRB index of 19 commodities futures gained 2.35 percent.
The MSCI stock index for Latin America climbed 3.85 percent, after having gained more than 10 percent earlier. Equity markets in the region trimmed most of their initial gains as lingering recession fears drove Wall Street into the red in the late afternoon.
Confidence is still shaky among equity investors, who fear commodity prices might fall more and corporate profits may be severely hurt in Latin America during an expected global recession. "Although the worst of the banking crisis may be behind us, attention is now focused on the economic crisis, which will play out further," J.P. Morgan analysts wrote in a research note.
Other markets fared better. Chile's blue chip IPSA index rose 1.53 percent, Colombia's IGBC index climbed 2.7 percent and Argentina's MerVal ended up 2.53 percent. On the foreign exchange market, a series of recent actions by several Latin American central banks supported regional currencies.
In Peru, the sol edged up to 3.059 per dollar in a calm session. It had closed at 3.065 per dollar on Wednesday after the central bank sold about $153.2 million in the foreign-exchange market. Since the beginning of the month, Peruvian policy-makers have spent $2.133 billion to support the currency.
In debt markets, yield spreads between emerging-market bonds and US Treasuries widened only 3 basis points to 626 basis points, according to the benchmark J.P. Morgan EMBI+ index. The indicator is seen as a key gauge of investors' aversion to risk. Argentina's sovereign bonds were lower, with total returns plunging 3.5 percent on the EMBI+, as investors feared they might be forced by the government to participate in a swap of guaranteed loans coming due between 2009 and 2012.
Comments
Comments are closed.