Business

South American markets hit all-time lows amid COVID-19

Stocks in region dive, and currencies close at new record lows

The stocks in South America have plunged as the COVID-19 spreads with rates of infection increasing rapidly outside of China.

Regional stocks slumped, in line with global markets.

The benchmark MSCI Latin America stock index fell 13.71% on Monday, down 44.20% since the start of the year.

Brazil’s Bovespa index dropped nearly 14%, the Colombian Stock Exchange gave up as much as 10.50% while those in Chile and Argentina lost 14.11% and 10.4%, respectively.

Most South American currencies have weakened in volatile trade as coronavirus fears worsened risk appetite and pushed investors to seek refuge in the dollar.

Since mid-February, the Colombian peso sank as much as 19%, hitting new lows and Brazil’s real fell 14%, as the world markets panicked by the economic impact of the pandemic.

The devaluation of oil amid the dispute between Saudis and Russians also weighed in the market crises.

The news about the 24.13% collapse of the Brent-type oil price and the 24.59% collapse of the Texas crude in addition to the Asian, European and Wall Street stock markets steep fall triggered a perfect storm.

The Colombian Stock Exchange dropped nearly 11% on Monday amidst worries about the coronavirus outbreak and the crisis in the oil market. As stocks fell to session lows at 1:45 in the afternoon, the stock market decided to temporarily shut-down operations.

In a Twitter post, the Colombian Stock Exchange announced that “if the Colcap index has a negative variation of 10% or more, trading will be suspended for 30 minutes.”

South American countries are closely tied to the U.S., Europe and China, their largest trading partners, and also highly sensitive to global market swings.

As the number of infections and deaths continue to rise in the region and as fear of the economy falling into a recession grows, countries take measures to tackle the spread of the virus and counteract its economic impact.

On Monday, the Brazilian government approved a series of measures to combat the economic and financial blow. Boosting liquidity in the financial system and maintaining the flow of credit in the economy are some of the actions announced.

Source
Anadolu Agency
Tags

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close