IMF Move Could Boost Latin American Markets

Latin American stocks, dragged last week by U.S. markets and Argentina’s troubles, could get some help in coming days from the approval by the IMF on Friday of $8 billion in new funds for Argentina.

Markets across Latin America fell last week on fears of an economic slowdown in the United States and concerns over whether Argentina can climb out of three years of recession and honor its debt payments.

Traders throughout the region said they would be watching U.S. economic indicators again this week for any signs of improvement.

Argentina’s blue-chip Merval stock index fell 6.2% last week, closing Friday at 300.10.

“I expect the market to recover this week after last week’s fall,” said Mario Zawadzki of Schweber brokers. Last week’s declines in Argentine stocks reflected drops in foreign markets, and there were few large sellers, he said.

In Mexico, investors are likely to remain on the sidelines this week, awaiting key U.S. retail sales and industrial production data on Friday, which could help market sentiment if it points to a much-hoped-for U.S. economic recovery, analysts said.

Perez Samano predicted Mexican stocks could see a modest rebound after shedding 7.39% last week, but focus would be firmly on U.S. data for signs of economic trends.