SAO PAULO, June 20 (Reuters) - Brazil's stocks and currency extended losses on Tuesday after a Senate committee rejected a proposal to streamline labor laws, boosting trader concerns over lawmaker support for President Michel Temer's ambitious reform agenda. The proposal, rejected in the social affairs committee by 10 to 9 votes, now moves to the constitutional and justice committee before its heads to the floor for a full vote. The Brazilian real weakened as much as 1.7 percent to a one-month low to 3.34 to the greenback, while the benchmark Bovespa stock index dropped 1.5 percent. Five-year Brazilian credit default swaps reached 242 basis points, the highest since May 22. Traders feared a political scandal may have driven some lawmakers to reconsider their support for other reforms, including a proposal to cut pension spending seen as critical to balance the government budget. The news drove investors away from Brazilian assets, adding to falling prices of commodities from iron ore to crude that weighed on assets from wider emerging markets earlier on Tuesday. News of increased supply by several key oil producers hammered crude futures to a seven-month low, extending a trend that has undermined attempts by OPEC and others to support prices by cutting output. Currencies of oil exporters led the declines in Latin American foreign exchange markets, with the Colombian peso slipping 2.2 percent to its weakest in a year. The Mexican peso was down 1 percent. Shares of oil companies tumbled, weighing on stock markets in the region. Losses in shares of Brazilian state-controlled Petróleo Brasileiro SA subtracted the most points from the Bovespa index, while shares of Colombia's Ecopetrol dropped 3.3 percent. Brazilian miner Vale SA also fell as concerns over Chinese demand for steel and global oversupply dragged iron ore futures lower.
Key Latin American stock indexes and currencies at 1635 GMT:
Stock indexes daily % YTD %
change change Latest
MSCI Emerging Markets 1006.95 -0.59 17.47 MSCI LatAm 2486.56 -2.19 8.62 Brazil Bovespa 60951.68 -1.71 1.20 Mexico IPC 49020.10 -0.3 7.40 Chile IPSA 4800.01 -0.51 15.62 Chile IGPA 24042.44 -0.47 15.96 Argentina MerVal 21657.19 1.71 28.01 Colombia IGBC 10843.39 -0.56 7.06 Venezuela IBC 118618.57 -0.24 274.13 Currencies daily % YTD %
change change Latest
Brazil real 3.3321 -1.43 -2.49 Mexico peso 18.1485 -1.04 14.30 Chile peso 664 -0.38 1.01 Colombia peso 3040.62 -2.15 -1.29 Peru sol 3.276 -0.31 4.21 Argentina peso (interbank) 16.1350 -0.53 -1.61 Argentina peso (parallel) 16.59 -0.36 1.39
(Reporting by Bruno Federowski)