Latin American stock markets tumbled on Friday as aversion to risky assets amid renewed fears about a possible global recession that led investors to seek refuge in the dollar and led the US currency to new highs in more than two decades.
* The euro and sterling fell against the dollar on Friday, after surveys showed the slowdown in business activity in the euro zone and the UK deepened this month and the economies were likely to slip into recession.
* The dollar index , which compares the currency against a basket of six other major currencies, rose just over 1% to its highest level in 22 years.
* “The world economy is going through an already long period of great uncertainty, which maintains a high tension in the markets that see few other options than the dollar as a safe haven asset to weather the storm in these stormy times”, said a foreign exchange trader.
* The losses were led by the Brazilian real, which depreciated 2.3314%, to 5.2366 units per dollar, while the Bovespa index of the Sao Paulo B3 stock exchange fell 2.71%, to 110,988.57 points.
* The Chilean peso fell 2.23% to 963.70/964.00 per dollar, with the extra pressure of a sharp drop in the price of copper , the country’s main export. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, lost 1.34%, to 5,231.86 units.
* Copper prices fell to their lowest level in almost two months on Friday on the strength of the dollar and fears that demand for metals will be affected by the recession after further increases in interest rates.
* The Mexican peso was trading at 20.1525 per dollar, down 1.11% against Thursday’s Reuters benchmark price, as investors fear the arrival of more restrictive monetary policies and fears of a possible recession also mount global.
* The main stock index S&P/BMV IPC , which includes the 35 most liquid companies in the Mexican market, fell 2.17% to 45,326.06 units, in its third consecutive day of losses.
* The Mexican stock market followed the same pessimistic line as the rest of global markets, which have presented a sour environment, with shares reaching two-year lows on Friday.
* In Argentina, the peso fell 0.21% to 145.48 per dollar in depreciation regulated by the central bank, while the Merval stock index fell 3.62% to 144,060.20 units, following the trend of global markets due to fears about the world economic future. This indicator recorded an intraday historical maximum value of 150,971.41 points at the beginning of the week.
* “A short-term pause is understandable if the market wants to continue with momentum in search of recovering ground,” said Leonel Buccolo of Rava Bursátil.
* The Colombian peso depreciated 1.21% to 4,418 units per dollar, affected by the global risk aversion environment; while in the stock market the MSCI COLCAP stock index devalued 1.86% to 1,179.26 points.
* The Peruvian currency, the sol, lost 0.64%, to 3.905/3.909 units per dollar. Meanwhile, the reference of the Lima Stock Exchange yielded 1.77%, to 499.86 points.
