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Latin American stocks plunge on recession fears

Latin American stocks plunge on recession fears

Latin American stocks plunged for a fourth straight day Friday on fears that a global recession will keep prices for the region's commodity exports low and continue punishing its biggest currencies.
Brazil's Ibovespa index slumped 8.5 percent within the first 30 minutes of trading, but then recovered some lost ground to trade down 5.6 percent at 31,911 at midday. The index has lost 57 percent of its value since peaking at 73,794 on May 19.
Brazil's currency, the real, recovered from early morning losses to trade at 2.3 to the U.S. dollar, following a central bank auction of US$1.7 billion in dollar swap contracts meant to prop up the currency. The real has lost about 47 percent of its value since peaking on Aug. 1.
Mexico's benchmark IPC index fell 3.9 percent to 17,101 as investors bet that companies would continue reporting third quarter losses. The peso, however, gained 1.6 percent to trade at 13.4 to the U.S. dollar after a volatile day Thursday that saw the central bank sell more than US$1 billion in currency reserves to stabilize the troubled currency.
Argentina's Merval index dropped 6.2 percent to 903.5, losing about 23 percent of its value this week on continued fears that a government plan to nationalize private pensions will drain companies' access to private capital.
Chile's IPSA meanwhile slipped 1.2 percent to 2,367, while Colombia's IGBC index fell 4.7 percent to 6,735.
Latin American stocks tanked across the region this week as investors balanced gains in the U.S. with fears that falling commodity prices, losses on currency derivatives and hedge funds' broad unwinding of local assets are hastening a regional downturn.


Updated : 2021-10-20 08:02 GMT+08:00