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Latam markets in the red as trade worries heighten

By Sruthi Shankar Aug 9 (Reuters) – Latin American currencies were set to end a tumultuous week on a soft note on Friday as worries about the U.S.-China trade dispute and global growth kept investors on edge. The Brazilian real fell about 0.5%, giving back some of Thursday’s gains of more than 1% when upbeat trade data from China and a stabilizing yuan lifted risk appetite. The mood was glum again on Friday after a Bloomberg report that Washington was delaying a decision about allowing some trade between U.S. companies and Huawei reminded investors that the prolonged trade rift was far from over. President Donald Trump said on Friday that the United States was continuing trade talks with China but was not going to make a deal for now and would hold off on doing business with Huawei until a deal is in place. “At this point in time, it’s hard to see either the U.S. or China having enough will to resolve their differences, much less before the new U.S. tariffs on Chinese goods kick in on September 1,” said Han Tan, market analyst at FXTM. “Should the barriers to global trade be raised next month, that would be another kick in the gut for risk appetite and may prompt another sell-off in risk assets.” Emerging market stocks were set to post a third straight week of losses, while an index of Latin American equities was on course to end the week flat. Sao Paulo-listed shares erased early gains as miner Vale fell 2.4% due to a plunge in iron ore prices. However, a 7% jump in shares of food processor BRF SA after the company swung back to profit after three quarterly losses boosted the main index. Shares in healthcare insurer Qualicorp SA surged 27% to their highest since February 2018 after private hospital group Rede D’Or Sao Luiz agreed to buy a 10% stake in the company. After Brazil’s pension reforms bill was passed in the lower house of Congress on Wednesday, investors are awaiting a vote in the Senate, which is expected to consider extending pension reform to states and municipal governments. Investors will also be watching Argentina’s election primary on Sunday, which will determine President Mauricio Macri’s chances of winning a second term in October. The country’s embattled peso, which has shed over 8% in the past month, is expected to take another beating next week if the business-friendly Macri fares worse than expected. The Mexican peso held largely steady after data showed industrial output rose 1.1% in June, rebounding from a contraction in the previous month. Latin American stock indexes and currencies at 1454 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 981.02 -0.33 MSCI LatAm 2764.46 -0.15 Brazil Bovespa 104080.43 -0.03 Mexico IPC 40364.96 -0.18 Chile IPSA 4901.56 -0.17 Argentina MerVal – – Colombia IGBC 12560.29 -0.07 Currencies Latest Daily % change Brazil real 3.9388 -0.32 Mexico peso 19.4208 -0.09 Chile peso 712.4 -0.51 Colombia peso 3377.21 -0.32 Peru sol 3.378 -0.15 Argentina peso 45.3900 -0.22 (interbank) (Reporting by Sruthi Shankar in Bengaluru; Editing by Dan Grebler)

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