(Updates prices throughout, adds details)
By Susan Mathew and Shreyashi Sanyal
July 30 (Reuters) - Peru's sol hit record lows and dollar
bonds fell on Friday after newly elected President Pedro
Castillo appointed a far-left prime minister but did not name a
finance minister, while the Latin American currencies index
headed for weekly losses.
Castillo appointed Guido Bellido, a member of his Marxist
party, as prime minister and did not name a finance minister in
his cabinet, raising uncertainty about the direction of policy
and the economy.
The move, which dimmed hopes for a moderate administration,
sent the 2060 bond issue down 1.4 cents on the
dollar to trade at 88.8 cents, near to one-month lows. The 2032
issue fell 1 cent, Refinitiv data showed.
Peru's sol sank 3.5%, putting it on course to end
around 5% lower in July - its eight straight monthly decline.
"The noise is likely to put upside pressure on (the sol) in
the near term," said strategists at Citi. "We move to neutral
our stance on Peru sovereign in our model portfolio due to
cabinet choices."
Most other Latam currencies also fell against a strong
dollar, with the MSCI's index sliding 1.8% and
heading for its worst month since January.
Brazil's real weakened 2%, looking past data that
showed public finances improved in June with government debt
falling to 84% of GDP in June, lowest in a year.
The real is set to break a three-month winning streak as
political noise and rising COVID-19 cases weigh.
Mexico's peso hit over three-week highs, before
dropping 0.2%.
Mexico's economy grew 19.7% in the second quarter compared
with the same quarter a year earlier, when the formal and
informal economy was largely shut down by coronavirus pandemic
restrictions. It was the first year-on-year quarterly growth
since before the pandemic.
But as the coronavirus crisis continues and cases rise
sharply, the economy is likely to slow in the third quarter,
said William Jackson, chief EM economist at Capital Economics.
Mexican shares, fell 0.8% after having scaled an
all-time high last session. The fall broke an eight day winning
run during which it gained 5.2%.
Among other regional share markets, a 5% slide for car
rental firm Localiza after second quarter results was
the most on Brazil's Bovespa index, while declining iron
ore prices weighed on miner Vale.
MSCI's index of Latin American stocks was
down 4.5%, its worst day since February and in line with a
global downturn in equity markets as China shares fell on
regulatory concerns, while Wall Street indices were weighed by
disappointing Amazon results.
Key Latin American stock indexes and currencies at 1846 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1276.77 -1.44
MSCI LatAm 2504.68 -4.1
Brazil Bovespa 122045.80 -2.89
Mexico IPC 51173.50 -0.89
Chile IPSA 4217.22 -0.86
Argentina MerVal 66229.87 -1.613
Colombia COLCAP 1236.74 -0.73
Currencies Latest Daily %
change
Brazil real 5.1873 -2.12
Mexico peso 19.9067 -0.35
Chile peso 760.5 -0.30
Colombia peso 3874 -0.78
Peru sol 4.068 -3.52
Argentina peso (interbank) 96.6800 -0.03
Argentina peso (parallel) 178.5 0.84
(Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Editing by Alistair Bell and Edmund Blair)
Dolores Redondo es colaboradora en El Demócrata, donde cubre una amplia variedad de temas, incluyendo actualidad, política, negocios, tecnología, deportes, entretenimiento y estilo de vida. Se enfoca en brindar información clara y útil sobre los acontecimientos del momento, ofreciendo a los lectores historias relevantes y perspectivas accesibles sobre temas de interés general.