EMERGING MARKETS-Latam assets slip as U.S.-Iran tensions heat up

Shreyashi Sanyal

Jan 6 (Reuters) - Latin American assets slipped on Monday, as escalating tensions between the United States and Iran after the killing of a top Iranian general continued to push investors away from risk, while the Chilean peso hit a three-week low. MSCI's index for Latin American stocks fell nearly 1%, on track to log its second day of declines, after the killing of Iranian Major-General Qassem Soleimani on Friday spurred a bout of safe-haven buying. The Latin American equity index had risen 9.8% last month. Assets across the developing world had a solid end to 2019, helped by the cooling of trade tensions between Washington and Beijing, but analysts now point to rising geopolitical uncertainties moving back to center stage at the beginning of the year. "We don't think the newest flashpoint will derail the green shoots emerging in the global economy and yet it's powerful enough to trigger a positioning squeeze, especially in equities," Mark McCormick global head of FX strategy at TD Securities, wrote in a note. MSCI's index for Latin American currencies dropped 0.3%. Chile's peso led declines with a 1.2% fall. The currency touched its lowest level since December 11, with falling prices of the country's main export, copper, exacerbating its decline. Copper eased as a survey showed slowing growth in China's services sector. Crude exporter Colombia's peso, held steady as oil prices gained more than 1.5%. The Brazilian real gained ground after two days of declines. A purchasing managers survey showed Brazilian economic activity in December grew at its slowest pace in six months as a slight improvement in the services sector failed to compensate for a more disappointing performance in manufacturing.

Key Latin American stock indexes and currencies at 1419 GMT:

Stock indexes Latest Daily %


MSCI Emerging Markets 1111.81 -1.07MSCI LatAm 2939.39 -0.98Brazil Bovespa 116698.63 -0.86Mexico IPC - -Chile IPSA 4805.97 -0.7Argentina MerVal - -Colombia COLCAP 1676.49 1.07Currencies Latest Daily %


Brazil real 4.0590 -0.10Mexico peso 18.8520 0.34Chile peso 773.5 -2.24Colombia peso 3249.88 0.00Peru sol 3.3208 -0.17Argentina peso 59.8200 0.00


(Reporting by Shreyashi Sanyal in Bengaluru)