- The Washington Times - Friday, March 20, 2009

MEXICO CITY (AP) - Latin American stocks fell on Friday, ending the week largely even as investors weighed a U.S. Federal Reserve plan to buy up to $1 trillion in bonds to ease credit and boost growth.

Brazil’s benchmark Ibovespa index slipped 0.9 percent to 40,076, ending the week up 2.7 percent. Shares in state-run oil company Petroleo Brasileiro SA, which comprise about 15 percent of the index, dropped 0.5 percent to 29.10 reals on Friday, but gained 7.1 percent for the week amid a 10 percent rally in crude prices.

Brazil’s currency weakened slightly to 2.25 reals to the U.S. dollar on Friday.

Mexico’s benchmark IPC index fell 1.2 percent to 19,363 as investors balanced concerns about the U.S. recession with hopes that a 75 basis-point cut in Mexico’s benchmark lending rate would fuel the local economy. The index lost 0.4 percent for the week.

The peso strengthened less than 1 percent on Friday to 14.17 to the dollar.

Mexico, which sends 80 percent of its goods to the U.S., has been especially vulnerable to recession there, with exports and money sent home by migrants plunging.

The world economic crisis is battering Latin American stocks, slashing credit and demand for the commodity exports on which many of the region’s biggest companies rely. As foreign investors dump local assets, currencies in Brazil and Mexico have lost a third of their value against the dollar since August.

The Fed jolted markets this week with plans to buy up to $1 trillion in Treasury bonds and other debt securities. The move initially cheered investors, but later drew concern that the massive cash injection could weaken the dollar and fuel inflation in the U.S., Latin America’s biggest trading partner.

The Dow Jones Industrial Average fell 1.7 percent to 7,278 on Friday in New York, ending a seven-day rally that saw the Dow gain 14 percent.

Argentina’s Merval index declined 0.9 percent to 1,070, while Chile’s IPSA fell 0.6 percent to 2,488, Peru’s IGBVL slipped 0.8 to 7,698 and Colombia’s IGBC lost 0.1 percent to 7,970.

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