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EMERGING MARKETS-Latam assets tumble as China raises tariffs on U.S. goods

Agamoni Ghosh

* China says tariffs on U.S. goods effective June 1

* Trade fears wipe out EM currency index gains for 2019

* Chilean stocks fall to lowest since December 2017

* Mexico's peso outperforms regional peers

May 13 (Reuters) - Latin American currencies and stocks fell on Monday after China said it will impose higher tariffs on a range of U.S. goods, days after U.S. President Donald Trump hiked tariffs on $200 billion worth of Chinese goods. MSCI's index of Latin American stocks fell nearly 2% after Beijing struck back. Currencies in the region also followed suit, with MSCI's emerging market currency index wiping out all of its 2019 gains on Monday as the tariff re-escalation rattled global markets. Brazil's benchmark Bovespa index slumped more than 2%, led by losses in the financial sector, while the real currency slipped about 1% to near its lowest since October 2018. Brazil's domestic outlook continued to darken, with the central bank's weekly survey of nearly 100 financial institutions showing the median 2019 growth forecast was trimmed further to 1.45%. That is the bleakest outlook so far this year.

Mexican stocks fell about 1% while the peso outperformed their regional peers. Investors closely watched developments related to Pemex as the government announced measures to help the state oil company, including renewing credit lines with JP Morgan, HSBC and Mizuho, as well as a gradual tax reduction for the firm. Cash-strapped Pemex has the largest debt among all state oil firms in Latin America. Chile's peso fell over 1%, tracking a dip in the price of copper, the country's top export, while stocks on the IPSA index fell to their lowest since December 2017. Asset managers JP Morgan and UBS have reduced their exposure to emerging market assets in recent days, while Citi said its clients made record outflows on emerging market FX for a third straight week.

Key Latin American stock indexes and currencies at 1425 GMT

Stock indexes daily % YTD %Latest change changeMSCI Emerging Markets 1016.23 -1.67 7.02MSCI LatAm 2593.60 -2.36 3.52Brazil Bovespa 92375.14 -2 5.11Mexico IPC 42565.65 -1.88 2.22Chile IPSA 4994.74 -1.11 -1.11Argentina MerVal 32541.56 -2.55 7.42Colombia IGBC 12517.16 -1.14 12.32Currencies daily % YTD %change change


Brazil real 3.9910 -1.19 -16.98Mexico peso 19.1675 -0.38 2.77Chile peso 694.1 -1.24 -11.45Colombia peso 3294.08 -0.67 -9.47Peru sol 3.328 -0.39 -2.73Argentina peso 45.5500 -1.43 -59.17


(Reporting by Agamoni Ghosh; Editing by Jeffrey Benkoe)