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Coronavirus stains Latin American stock exchanges red for the fourth consecutive day

2020-02-27T18:12:08.142Z


The Brazilian market, the only country in the region that has registered a case of contagion, prolongs its fall after Wednesday's hit, when it left 7%


The economic world’s initial fear of coronavirus has become a dread and has made the definitive leap to Latin America. The main stock exchanges in the region have already accumulated four consecutive days downwards - five in the case of Brazil - for fear that the epidemic will hit both the real economy and business results. The figures are thick: the Brazilian parquet, the most hit on Wednesday - when it was left 7%, after the first contagion was known in the country and throughout Latin America - is already dragging a decrease of almost 10% in two sessions , the Mexican lost almost 7% since last Monday and the Argentine is the worst unemployed this Thursday: shortly after the opening he left more than 4%.

MORE INFORMATION

  • The coronavirus punishes the stock market again, with sharp falls in airlines and tourism
  • The impact of the coronavirus on copper puts Chile and Peru in check

The coup, which began as an Asian only, is already global: three billion valuations have been erased from the map in just a few sessions in just one week, with practically all the indices of the world in red and with the airline and tourism sector as Great victim. Except for last-minute rebound this Friday, Wall Street will close its worst week since 2008 and the European stock markets are approaching their biggest hit since 2011, in full debt crisis and with the banks of the Old Continent in full recapitalization. Although with a certain offset, the coup has reached Latin America and has done so strongly, with a widespread feeling that the storm can last for weeks.

The reference currencies in the region are also fitting the reverse of the epidemic originating in Wuhan (China). Just as the picture began to clear with the principle of trade agreement between the United States and the Asian giant, which reduced tension, the coronavirus has appeared as a huge distorting element in the currency market. The Brazilian real deepens Thursday its fall to new historical lows, around 4.5 units per dollar; a situation similar to the one that crosses the Chilean peso, also in a zone of historical minimums. And, although starting from a remarkably more comfortable level, both the Mexican peso - the most liquid currency in the emerging world - and the Colombian peso also accumulate a long week down.

It is still too early to have a real measure of how much the macroeconomic impact will be. Next week, when the Organization for Economic Cooperation and Development (OECD) updates its forecasts, it will begin to step on somewhat firmer ground in terms of hard data, with a first thermometer of the situation. Investors, however, have already taken positions, anticipating a short circuit not less in the engine room of an economy, the world, which had been hanging in recent quarters. And the reaction has been as expected in these cases: a stampede flight of risk assets (stock market and emerging currencies, especially), seeking refuge in bonds (Americans are at a minimum, pressured downward by the drastic rebound of uncertainty), in gold (which flies in a maximum zone of one year, touching 1,700 dollars per ounce) and in currencies such as the yen and the dollar, despite the fact that many investors begin to incorporate an upcoming rate reduction of interest of the Federal Reserve.

In the Latin American case, the markets incorporate, in addition to a worse macroeconomic perspective and business results, the fall in the prices of the main raw materials: as a net exporter of oil, copper, iron and soybeans, among others, the region accuses the Loss of value of these commodities - of which China, by far the country with which the virus has been most primed, is the first customer - that hits its trade balance. The case of copper is paradigmatic: the fall of the last few days leaves the world's leading producer, Chile, and Peru, the country that lags behind, in a complicated position.

Source: elparis

All business articles on 2020-02-27

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