Currencies and stock markets in Latin America fall due to uncertainty over the banking sector and the expectation of the Fed

By Froilan Romero

SANTIAGO, March 17 (Reuters) – Most Latin American stock markets traded at a loss on Friday as uncertainty persisted over the health of the banking sector following the collapse of Silicon Valley Bank (SVB), while market attention was focused on the upcoming US Federal Reserve monetary policy meeting.

* The collapse of SVB, the biggest U.S. bank failure since Washington Mutual during the 2008 financial crisis, hit bank stocks and sparked concerns of contagion in global markets.

* Meanwhile, the U.S. Federal Reserve would raise interest rates by 25 basis points on March 22 despite recent turmoil in the banking sector, according to a strong majority of economists polled by Reuters, who were divided on the risks for your vision of the terminal rate .

* Market bets for the next meeting have been on a roller coaster ride, going from expecting a 50 basis point move after testimony last week from Fed Chairman Jerome Powell to pausing at a some time after the collapse of some regional banks.

* The Mexican peso traded at 18.9240 to the dollar, down 1.19% from Thursday’s Reuters benchmark price, and is expected to end the week with losses as uncertainty persists for the sector banking, in a session that is expected to be volatile due to the expiration of futures and options in the United States.

* “High volatility is expected as it is the first ‘Witching Day’ of the year – futures and options expire – also anticipating higher trading volume,” Banorte analysts said in a statement. note sent to their customers.

* The main S&P/BMV IPC stock index, which includes the 35 most liquid companies in the Mexican market, fell 1.07% to 51,940.32 units, changing the previous day’s trend.

* “After the volatility generated in financial markets by the failure of Silicon Valley Bank and the problems at Credit Suisse, investors will await the decision and action taken by the Federal Reserve on Wednesday March 22,” he said. in a note sent to their clients.

* The Brazilian real depreciated 0.99% to 5.2817 units to the dollar, while the Bovespa index on the Sao Paulo B3 stock exchange fell 1.56% to 101,822.65 points.

* In Argentina, the peso fell 0.20% to 203.35 to the dollar in central bank-regulated depreciation, while the Merval stock index fell 1.64% to 219,649.36 units, due to profit taking after the strong rise the day before.

* “Reality indicates that the local index situation may get worse before it starts to improve,” Portfolio Personal Inversiones said. “The instability of the world’s largest economy is unlikely to end any time soon. Even if the financial system is gradually recovering, (global) inflation remains a problem,” he added.

* The Chilean peso fell 0.72% to 833.20/833.50 to the dollar. Meanwhile, the Santiago Stock Exchange’s flagship index, IPSA, rose a low of 0.07% to 5,200.81 units.

* The Colombian peso rose 0.72% to 4,800 units to the dollar, while the stock market’s benchmark MSCI COLCAP index fell 0.18% to 1,116.44 points.

* “All week, markets have been in a state of hypersensitivity to bad banking news, following a series of collapses in the United States and major concerns about the situation at Credit Suisse,” said Ricardo Evangelista, principal analyst of ActivTrades.

* Peruvian sol fell 0.63% to 3.7953 to the dollar. While the Lima Stock Exchange benchmark fell 0.45% to 551.18 units.

(Reporting by Froilán Romero. Additional reporting by Nelson Bocanegra in Bogotá, Hernán Nessi, Jorge Otaola and Walter Bianchi in Buenos Aires, Editing by Manuel Farías)