Top Stories
Top Stories
Wires

EMERGING MARKETS-LatAm stocks rise on trade hopes; Argentine debt plan in focus

Agamoni Ghosh

focus@ (Updates prices, adds details, changes quote) Argentine investors asses plan to reprofile debt

* Brazil steers clear of recession in Q2

* U.S.-China trade de-escalation hopes lift equities

Aug 29 (Reuters) - Latin American stocks rose on Thursday as Beijing's latest comments signalled a hopeful resolution to the trade dispute with Washington, but Argentina's plan to re-profile nearly $100 billion of its existing debt put its assets under pressure. China's commerce ministry said both sides were discussing the next round of talks scheduled for September and hoped U.S. officials could cancel the planned additional tariffs to avoid an escalation. Following that, U.S. President Donald Trump said in a Fox News radio interview that trade talks were scheduled for next Thursday "at a different level," but did not provide any additional details. MSCI's index of Latin American stocks rose 2% with Brazil's Bovespa leading gains helped by shares of miner Vale and oil company Petrobras. The real moved 0.2% higher after data showed Brazil's economy rebounded strongly in the second quarter after having shrunk in the first, indicating Latin America's largest economy comfortably avoided falling back into recession. Mexican peso was marginally lower, while Colombia's peso jumped 1% as oil prices rose, lifted by a steep drop in U.S. crude inventories. .

DEBT 'REPROFILE' Argentine bond prices fell and country risk soared to levels not seen since 2005 after the government said it would negotiate with holders of its sovereign bonds and the International Monetary Fund to extend debt maturities as a way of ensuring the country's ability to meet its obligations. The peso, which fell nearly 3%, recovered after the central bank intervened, while stocks on the Merval index dove 4.6%. The peso has shed about 24% of its value, while the Merval has plunged more than 45% since business-friendly Macri suffered an unexpectedly large defeat in primaries at the hands of populist-leaning Peronist candidate Alberto Fernandez. "This plan is fine for now but what happens if Fernandez wins in October," said Win Thin, global head of emerging market strategy at Brown Brothers Harriman in New York. "We have to wonder if he will stick with this (the debt reprofile) because at this point we just don't know what he will do." Investors fear a return of the left to power could herald another full-blown debt crisis in Latin America's third-largest economy.

Key Latin American stock indexes and currencies at 1920 GMT

Stock indexes daily % change

Latest

MSCI Emerging Markets 971.39 0.63MSCI LatAm 2558.74 1.99Brazil Bovespa 100606.84 2.46Mexico IPC 41872.22 2.27Chile IPSA 4682.95 1.59Argentina MerVal 24148.48 -5.144Colombia IGBC 12513.56 0.58Currencies daily % change

Latest

Brazil real 4.1620 0.12Mexico peso 20.1404 -0.22Chile peso 720.55 0.35Colombia peso 3436.08 1.07Peru sol 3.3868 0.42Argentina peso 57.8600 0.41

(interbank)

(Reporting by Agamoni Ghosh in Bengaluru; Editing by Sandra Maler)