EMERGING MARKETS-Stocks, currencies fall after Trump reiterates March 4 tariff deadline

Reuters
28 Feb
EMERGING MARKETS-Stocks, currencies fall after Trump reiterates March 4 tariff deadline

Venezuela bonds lose ground

Kurdish militant leader calls for end to conflict with Turkey

Petrobras shares drop after results

MSCI Latam stocks index down 0.7% FX down 0.6% at 1520 GMT

By Lisa Pauline Mattackal

Feb 27 (Reuters) - Emerging market stocks and currencies fell on Thursday on renewed anxiety about U.S. tariffs after President Donald Trump said proposed levies on Mexico and Canada were set to go into effect next week as previously scheduled.

China will be charged an additional 10% on that day, Trump said in a post on Truth Social.

Mexico's peso MXN=D3 fell 0.4%, while the Chilean peso slumped 1.2%. The offshore Chinese yuan CNH=D3 lost 0.4%.

MSCI's index of Latin American currencies fell 0.6%, while a gauge of regional stocks .MILA00000PUS dipped 0.7%.

Trump's announcement followed his comments late Wednesday that implementation of tariffs on Mexico and Canada could be delayed until April 2, though a White House official later said the March 4 deadline remains in effect.

The back-and-forth comments highlight the uncertainty investors have faced from U.S. tariff threats, with many hoping they are primarily a negotiation tactic. Most Latam currencies remain positive versus the dollar so far this year.

"The market has been fading and maybe fading too much, these types of (tariff) headlines, and as you approach some of these deadlines then it's worth also taking a bit more of a defensive position," said Alejandro Cuadrado, chief strategist FX & Latam FI at BBVA.

Technical factors were also adding to the decline, Cuadrado said, as long positions in currencies such as the Chilean peso had begun to look stretched.

Indexes tracking global EM stocks .MSCIEF and currencies .MIEM00000CUS extended losses to fall 1.1% and 0.4%, respectively.

Trump also said late Wednesday he was reversing a license given to Chevron CVX.N to operate in Venezuela, accusing President Nicolas Maduro of not making progress on electoral reforms and migrant returns.

Prices of Venezuela's dollar bonds and those from state-owned energy company PDVSA dropped, with most down around two cents.

Brazil's real BRBY= dipped 0.5%. The country's vice president will have a call with U.S. Commerce Secretary Howard Lutnick on Friday to discuss tariffs, according to a report.

On the data front, Mexico's seasonally adjusted jobless rate was 2.6% in January.

Brazil's jobless rate rose to 6.5% in the quarter through January. The country posted a current account deficit of $8.655 billion in January, higher than the $8.3 billion shortfall forecast in a Reuters poll of economists.

Meanwhile, shares of Brazil's state-run oil firm Petrobras PETR4.SA dropped 4.8% after the company reported a surge in capital expenditure spending.

Elsewhere, Turkey's main stock index jumped 1.8% .XU100, though the lira TRYTOM=D3 was little changed after jailed militant leader Abdullah Ocalan called on his Kurdistan Workers Party (PKK) to lay down its arms, a move that could have far-reaching political and security consequences for the region.

HIGHLIGHTS

** IMF keeps India's 'stabilised' exchange rate classification through 2024

** G20 finance meeting fails to agree joint communique

** CEE MARKETS-Zloty touches 10-year high as markets eye Ukraine, interest rates

Key Latin American stock indexes and currencies at 1520 GMT:

Equities

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1123.56

-1.04

MSCI LatAm .MILA00000PUS

2025.13

-0.65

Brazil Bovespa .BVSP

124760.75

-0.01

Mexico IPC .MXX

53108.45

-0.35

Chile IPSA .SPIPSA

7382.51

0.43

Argentina Merval .MERV

2242730.32

-1.42

Colombia COLCAP .COLCAP

1641.99

-0.25

Currencies

Latest

Daily % change

Brazil real BRL=

5.8341

-0.53

Mexico peso MXN=

20.4841

-0.35

Chile peso CLP=

952.23

-1.17

Colombia peso COP=

4118.31

-0.38

Peru sol PEN=

3.666

-0.14

Argentina peso (interbank) ARS=RASL

1061.5

-0.02

Argentina peso (parallel) ARSB=

1205

2.07

Currencies against the dollar since Trump 2024 election win https://tmsnrt.rs/4bqTRX6

(Reporting by Lisa Mattackal in Bengaluru; Editing by Louise Heavens)

((LisaPauline.Mattackal@thomsonreuters.com;))

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