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Argentine stocks lag Latam markets, currencies rise

(Adds details, updates prices) * Argentina stocks slump, peso rises on action * Brazilian telecoms carrier Oi slides 12% * Investors brace for dovish Fed at Jackson Hole By Agamoni Ghosh Aug 20 (Reuters) – A soft U.S. dollar helped most Latin American currencies rise on Tuesday, as investors awaited further guidance from central banks in the wake of global slowdown fears, while Argentine stocks stood out for their losses among its regional peers. Argentina’s Merval index that opened after an extended weekend, sank 10% factoring in the news of ratings agencies Fitch and Standard & Poor’s downgrading the country’s sovereign debt rating following a shock primary election. The peso which had shed over 1% in the early hours of trading recovered to climb 0.5% after the central bank intervened and poured $112 million of its reserves into dollar auctions. The new treasury minister, Hernan Lacunza, further sought to calm investors assuring the country will stand by its 2019 fiscal targets agreed with the International Monetary Fund, and work to stabilize its currency. President Mauricio Macri, who is struggling to revive his campaign for a second term, is betting that the new treasury chief can help stabilize the economy. “Potentially this new guy will be in office for only three months so I don’t think he’ll be able to do much,” said Edward Glossop, Latin America economist at Capital Economics “Its a job where he has his hands tied by the IMF framework as Argentina has fiscal goals it needs to reach and Lacunza doesn’t have much discretion to loosen monetary policy.” MSCI’s index of Latin American stocks rose 0.2% with stocks in Mexico leading gains buoyed by hopes of a resolution to a pivotal pipeline dispute by President Andres Manuel Lopez Obrador. Sao Paulo-traded stocks rose only marginally, capped by a near 12% slump in shares of Brazilian telecoms carrier Oi after reports that its largest shareholder is seeking to replace Chief Executive Officer Eurico Teles. Currencies in the region rose across the board as dip in U.S. treasury yields dented the dollar with investors bracing for a potentially dovish Federal Reserve at a Jackson Hole, Wyoming, gathering later this week. Colombia’s peso and Chile’s peso rose between 0.5% and 0.8%, while Brazil’s real came off its three-month lows. Key Latin American stock indexes and currencies at 1930 GMT Stock indexes daily % Latest change MSCI Emerging Markets 980.92 0.33 MSCI LatAm 2585.69 0.21 Brazil Bovespa 99560.63 0.09 Mexico IPC 39677.66 0.31 Chile IPSA 4776.78 -0.21 Argentina MerVal 27281.49 -10.28 Colombia IGBC 12602.62 0.6 Currencies daily % Latest change Brazil real 4.0415 0.62 Mexico peso 19.7417 0.57 Chile peso 708.3 0.71 Colombia peso 3405.23 0.83 Peru sol 3.382 0.12 Argentina peso 54.7100 0.53 (interbank) (Reporting by Agamoni Ghosh in Bengaluru; Additional reporting by Tom Arnold; Editing by Sandra Maler)

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