*
Stocks up 0.4%, currencies flat
*
Chile's stock market leads gains as copper prices surge
*
EM portfolios post largest net foreign annual inflow since
2021
(Updates to mid-session trading)
By Ragini Mathur and Johann M Cherian
Jan 12 (Reuters) - Most stocks and currencies in
resources-rich Latin America were higher on Monday, tracking
gains in commodity ?prices, while investors sold the dollar after
the Trump administration's threat to indict U.S. Federal Reserve
Chair Jerome Powell resurfaced ?worries about the Fed's
independence.
The Trump administration subpoenaed Powell over comments he
made to Congress ?about a building renovation project, prompting
the Fed chief to ?call the move a "pretext" ?to gain more
influence over the setting of interest rates.
MSCI's Latin American currencies gauge was
pinned at record highs, ?with pesos of Chile and Mexico
among top ?gainers as the dollar fell. The equities index
was up 0.4%, to its highest level since early
2020.
"Whether the White House's latest attempt to ?influence Fed
policy succeeds or not is key ?to the ?medium- and long-term
market implications. But if it does succeed, we foresee a weaker
USD," said Thierry Wizman, global FX & rates strategist at
Macquarie Group.
Both MSCI indexes ?closed last week with significant gains,
despite heightened volatility after the U.S. military captured
Venezuelan leader Nicolas Maduro. Many investors viewed this
development positively, expecting U.S. actions to facilitate
market-friendly reforms across the Latin American region.
The country's stocks and defaulted international debt
have rallied in the aftermath of the intervention and Trump and
his team have told the oil ?companies ?they need to invest and
rebuild Venezuela's sector first, and that any debt repayment
would come later.
On Monday, Mexican stocks were a standout, up 1% at ?a
record high, as mining companies Industrias Penoles
and Grupo Mexico rallied, tracking higher prices
of precious and base metals.
Stocks in copper exporter Chile and Peru
advanced 1.2% and 2.5%, respectively. Markets
in Colombia were closed on account of a public holiday.
Geopolitical developments continued to dominate elsewhere in
emerging markets as investors monitored a violent crackdown on
ongoing protests in oil-rich Iran.
Meanwhile, data from a banking trade ?group showed emerging
market portfolio flows rebounded sharply in December, making the
overall yearly net inflow the largest since 2021.
Key Latin American stock indexes and currencies at 20:05
GMT:
Latin American market prices
from Reuters
Eq Latest Daily % change
ui
ti
es
MS 1467.04 1.01
CI
Em
er
gi
ng
Ma
rk
et
s
MS 2832.21 0.44
CI
La
tA
m
Br 163275.34 -0.06
az
il
Bo
ve
sp
a
Me 66787.17 1.1
xi
co
IP
C
Ch 11066.16 1.25
il
e
IP
SA
Ar 3077458.94 -0.388
ge
nt
in
a
Me
rv
al
Cu Latest Daily % change
rr
en
ci
es
Br 5.3707 0.01
az
il
re
al
Me 17.9119 0.26
xi
co
pe
so
Ch 883.9 1.01
il
e
pe
so
Co 3711 0.04
lo
mb
ia
pe
so
Pe 3.36 0.01
ru
so
l
Ar 1467 -0.14
ge
nt
in
a
pe
so
(i
nt
er
ba
nk
)
Ar 1485 1.35
ge
nt
in
a
pe
so
(p
ar
al
le
l)
(Reporting by ?Ragini Mathur and Johann M Cherian in Bengaluru;
Editing by Paul Simao and Sahal Muhammed)
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