Most Latin American currencies and
stocks rose on Tuesday as higher commodity prices helped them
overcome the broader risk-off mood in the global financial
Markets after the Bank of Japan’s surprise policy shift.
Brazil led the advance, with its real up 1.7%
against a weaker dollar, while Sao Paulo’s Bovespa stock
index gained 2.1% to hit a one-week high.
Top Brazilian miner Vale rose 1.2%, while
state-owned oil giant Petrobras gained 0.2%.
Prices of oil, industrial and precious metals rose, lifting
assets of most commodity-export oriented countries in Central
and South America.
The Brazilian Supreme Court on Monday granted an injury
allowing President-elect Luiz Inacio Lula da Silva to increase
social investment, while outlawing an opaque congressional
The Mexican peso gained 0.3%, while Chile’s peso
and Peru’s sol added 0.4% each on higher copper
The MSCI’s index for Latin American stocks
gained 1.6%, against a 0.8% fall in the broader emerging markets
Most Asian and European markets were left reeling after
Japan’s central bank widened the allowable band for long-term
yields to 50 basis points either side of its 0% target, from 25
basis points previously.
The move stunned investors already worried about the
economic fallout of rising interest rates and surging inflation,
and was seen by many as a possible end to Japan’s ultra-loose
“It’s important not to underestimate the impact this could
have, because tighter BoJ policy would remove one of the last
global anchors that have helped to keep borrowing costs at low
levels more broadly,” Deutsche Bank analyst Henry Allen said in
a client note.
Also weighing on global sentiment was a surge in coronavirus
infections in China, with many fearing a new wave of infections
could further hit corporate supply chains. Stocks in China ended
China kept benchmark lending interest rates unchanged for
the fourth consecutive month on tuesday, matching the forecasts
of most market watchers who nevertheless expect further monetary
easing to prop up a slowing economy.
Among other emerging markets, Hungary’s forint
edged lower against the euro after the country’s central bank
left interest rates unchanged.
Key Latin American stock indexes and currencies at 1445 GMT:
Stock indexes Latest Daily %
MSCI Emerging Markets 951.12 -0.68
MSCI LatAm 2126.31 2.64
Brazil Bovespa 106965.59 2.13
Mexico IPC 0.00 0
Chile IPSA 5252.85 0.88
Argentina MerVal 171310.90 1.388
ColombiaCOLCAP 1221.04 0.46
Currencies Latest Daily %
Brazil real 5.2170 1.74
Mexico peso 19.7220 0.35
Chile peso 889 -0.07
Colombia peso 4766.55 0.15
Peru sol 3.83 -0.03
Argentina peso (interbank) 173.9000 -0.16
Argentina peso (parallel) 322 0.93
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun