EMERGING MARKETS-Brazilian equities lead regional losses as tariff fears heat up
SAO PAULO, March 7 (Reuters) - Brazil's benchmark Bovespa index and real currency led market losses across Latin America on Wednesday, after the departure of a high ranking aide to U.S. President Donald Trump renewed fears of a global trade war.
On Tuesday, Gary Cohn, the top economic advisor to Trump and a voice for Wall Street in the White House, said he would resign, after he lost a fight with Trump over a plan for steel and aluminum import tariffs.
Investors widely interpreted the move as clearing the path for Trump to keep pushing for protectionist measures, sending stocks of steelmakers sliding.
In Brazil, Vale SA, a significant miner of steelmaking ingredient iron ore, was off 1.6 percent in afternoon trade, accounting for 129 points of the Bovespa's 1,028-point slide.
Steelmakers Usinas Siderúrgicas de Minas Gerais SA , Cia Siderúrgica Nacional, and Gerdau SA fell 4 percent, 3.5 percent, and 1.4 percent, respectively.
"The market improved yesterday on the possibility that the Trump administration might reverse its steel policy. But it became clear that he's not going to reverse that position," said Pedro Paulo Silveira, an economist at brokerage Nova Futura.
Other news also weighed on Brazil's equities. Shares in Smiles Fidelidade SA, an administrator of consumer loyalty programs, was the Bovespa's biggest percentage loser, plummeting 12.6 percent after the company released disappointing dividend guidance.
Overall, the Bovespa was down 1.2 percent, its biggest intraday loss since February.
Stocks also posted moderate losses in all other major Latin American markets, with Mexico's IPC and Argentina's Merval falling 0.52 percent and 0.91 percent, respectively.
Chile's IPSA index, while still in the red, posted relatively modest losses, dropping only 0.19 percent, after the nation posted its biggest trade surplus in four years in February thanks to strong copper exports.
Key Latin American stock indexes and currencies at 1735 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 1186,12 -0,65 3,06 MSCI LatAm 3061,80 -1,37 9,77 Brazil Bovespa 84626,03 -1,2 10,76 Mexico IPC 47635,62 -0,52 -3,48 Chile IPSA 5537,83 -0,19 -0,48 Chile IGPA 27754,51 -0,17 -0,81 Argentina MerVal 32567,42 -0,91 8,32 Colombia IGBC 11404,35 -0,23 0,30 Venezuela IBC 4868,07 2,7 -84,65 Currencies daily % YTD % change change Latest Brazil real 3,2414 -0,98 2,22 Mexico peso 18,8010 -0,31 4,78 Chile peso 602,95 -0,51 1,94 Colombia peso 2863,44 -0,36 4,14 Peru sol 3,255 -0,15 -0,55 Argentina peso (interbank) 20,3550 -0,07 -8,62 Argentina peso (parallel) 20,44 -0,05 -5,92 (Reporting by Gram Slattery, Editing by Rosalba O'Brien)
