Argentine markets fall on cenbank, global downturn

Argentine financial markets closed lower on Thursday on jitters over the appointment of a new central bank president and fears about European sovereign risk. The benchmark MerVal .MERV index dropped 3.81 percent to close at 2,236.96, even though the nominee for Central Bank chief, pro-government economist Mercedes Marco del Pont, tried to send a message of calm and vowed to maintain the managed float on the foreign exchange market. Among the biggest losers was Banco Macro, (BMA.BA) down 6.41 percent to close at 10.1 pesos per share. Macro holds large amounts of Argentine sovereign debt and its share price tends to fall when bond prices do. President Cristina Fernandez nominated Marco del Pont to head the central bank after firing the former chief for opposing a plan to use foreign currency reserves to pay off government debt. [Read the full article]

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Brazilian stocks logged their weakest day of the year so far on Thursday, following global stocks lower, as sovereign concerns about the euro zone led investors to dump riskier assets. The benchmark Bovespa index .BVSP plunged 4.73 percent to 63,934.01, its biggest drop since shedding 4.75 percent on Oct. 28, 2009, on concerns about the global economic recovery. Worries that Greece, Spain and Portugal might prove to be weak links in the euro zone rippled beyond Europe, prompting investors on Thursday to send global stock markets lower. “That sort of thing worries people,” said Joao Medeiros, a partner at Pioneer Corretora in Sao Paulo, Brazil’s largest currency brokerage. “The market in Brazil is very linked to risk appetite.” Stocks fell across the world. European shares fell by the most in 10 weeks on Thursday. For more see [ID:nLDE6131SI]. [Read the full article]

Toronto’s main stock index notched its steepest percentage drop since early October on Thursday as investor confidence was shaken by intensifying concerns about sovereign debt in some euro zone countries. Investors flocked to the safety of U.S. Treasury bonds and the greenback, which also took flight on lackluster U.S. jobs data. [FRX/] The strength in the greenback weighed heavily on the price of oil, which plunged 5 percent to $73.14 a barrel, as well as on the price of gold, which hit a three-month low of $1,060.50 an ounce. [GOL/][O/R] Barrick Gold (ABX.TO) topped the list of influential names on the downside, sliding 4.2 percent to C$36.45, while Suncor Energy (SU.TO) dropped 3 percent to C$31.71. Potash Corp of Saskatchewan (POT.TO) sank 5 percent to C$109.15. “It’s an aversion to risk and that’s caused the U.S. dollar to go up and, of course, on days like this you track the U.S. dollar and U.S. treasuries. [Read the full article]

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* Sees possible trouble if key steps not taken (Adds analyst reaction, remarks from news conference) WINNIPEG, Manitoba, Feb 4 (Reuters) – The Canadian economy is looking up and should recover its lost ground this year, well ahead of Japan and Europe, though possible storms lie ahead, Bank of Canada Governor Mark Carney said on Thursday. “My message is relatively straightforward: the thaw is coming,” he said. “The recovery has begun. After a brutal economic winter, spring is within sight.” The optimistic signs in his speech were enough for Scotia Capital to suggest he was carving an independent exit strategy, possibly hiking rates before some other advanced economies, though this was not a unanimous view. “On net, we read this as a speech that reinforces the notion that the need for emergency levels of stimulus is over,” Scotia economists Derek Holt and Karen Cordes wrote, suggesting hikes by the third quarter and quite possibly earlier. [Read the full article]

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