Deutsche sees Latam retesting lows despite rally
Reuters, 06/5/2000 12:48
NEW YORK, June 5 (Reuters) - Deutsche Bank
said on Monday that last week's rally in Latin
America's exchanges helped markets overcome
a month of poor performance but warned that
stocks could likely retest lows soon.
An upswing on Friday, fueled by U.S. data that
suggested no further rate hikes may be needed
to cool the economy, boosted shares in Mexico,
Argentina and Brazil.
A report on U.S. employment in May, released
early on Friday, made investors worldwide
believe that a series of six interest rate hikes
delivered by U.S. central bankers over the past year were beginning to pay
off as evidence surfaced of a slowing of the U.S. economy.
"The U.S. labor statistics released on Friday led the U.S. market to soar,
lifting Latin American equities," said Deutsche's strategist Renato
Grandmont.
On Friday, Mexican stocks rallied 7.2 percent, Argentine shares advanced
6.1 percent while Brazil's exchange rose 5.0 percent.
"We believe that the recent statistics will provide the market with a period
of improving conditions," Grandmont said in a research note.
"However, we believe that we are not over the hump of uncertainty over the
speed of and degree of the U.S. economic slowdown yet and that the Latin
markets will still probably retest their lows for the year this summer."
The data boosted the two major U.S. indexes, the technology-heavy
Nasdaq (INDEX:$COMPX) and the Dow Jones industrial average
(INDEX:$INDU), by 6.44 percent and 1.34 percent respectively, and the
enthusiasm spilled over into all of the region's emerging markets.
The Deutsche strategist said the region's markets will continue to track
U.S. markets, with a special focus on the Nasdaq index.
Copyright 2000, Reuters News Service |
