Russian assets hit by geopolitical tensions, Chile markets cheer election results


  • Chilean stocks jump to highest level since April
  • Russian stocks on track for worst session this year
  • Mexico’s peso off as governor warns of inflation

Nov 22 (Reuters) – Russia’s rouble slumped to four-month lows on Monday over geopolitical tensions regarding Ukraine, while Chile’s peso jumped 3% and stocks 9% as a far-right presidential candidate took the lead in an election first round.

The rouble dived past 74 a dollar and Russian stocks (.IMOEX) fell more than 3.5%, looking to post their worst session this year, on rising concerns from the West over a Russian military build-up near Ukraine. read more

Ukrainian government bond prices tumbled to their lowest in more than a year , while the Ukrainian currency slipped to seven-week lows against the dollar.

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The Kremlin, meanwhile, said it was alarmed by a U.S.-backed push to supply Ukraine with sophisticated weapons. read more

“For markets at the moment, there is this pricing in of increasing risk and if it materializes there is definitely further for the rouble to go,” said Simon Harvey, a senior FX analyst at Monex Europe.

“For Russian assets, U.S. sanctions is the biggest downside risk.”

Russian tensions with the West have already been high this year, with the United States and the European Union sanctioning Russia over the alleged poisoning of Russian opposition leader Alexei Navalny and election meddling.

The Belarusian rouble also sank 1.7% against the greenback after President Alexander Lukashenko said “war is unavoidable” if a migrant crisis at its border with Poland deteriorated “too far”. read more

An index of emerging market currencies (.MIEM00000CUS) fell 0.2%, with a rebound in Turkey’s beleaguered lira also fizzling out. read more

Meanwhile, Chilean assets surged, with the currency jumping 2.2% to 810 per dollar, while stocks (.SPIPSA) vaulted up to 9% to a seven-month high.

Hard-right former congressman Jose Antonio Kast is seen competing with leftist lawmaker and former protest leader Gabriel Boric in a presidential election run-off on Dec. 19. Focus is now on the composition of congress. read more

“There will be this kind of optimistic repricing because there is some political clarity but there is still a big event risk coming with the second round,” Monex’s Harvey said.

Leading up to Sunday’s vote, Chile’s peso had slid to 18-month lows, and is down almost 12% this year.

Elsewhere, Brazil’s real was flat, while Mexico’s peso slipped 0.5% with the central bank governor voicing worries about rising inflation in Mexico and normalization of U.S. monetary policy occurring in an intense and simultaneous manner. read more

Broader market sentiment was subdued on Monday as rising COVID-19 cases forced another lockdown in Austria while Germany called for tighter curbs.

Meanwhile, U.S. stocks gained after President Joe Biden picked Federal Reserve Chair Jerome Powell to lead the bank for a second term. read more

Key Latin American stock indexes and currencies at 1913 GMT:

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Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; Editing by Angus MacSwan and Alex Richardson

Our Standards: The Thomson Reuters Trust Principles.

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