EMERGING MARKETS-LatAm stocks pulled lower by Mexico, peso drops against dollar

 (Recasts throughout, updates stock and currency prices, adds
quote) By Aaron Saldanha Nov 8 (Reuters) - Latin American stocks fell on Thursday as
Mexican stocks saw their biggest daily drop in seven years after
a senator from the incoming party presented a proposal to stop
banks from charging commissions for certain services such as
cash withdrawals from ATMs. This comes less than two weeks after Mexico's
President-elect Andrés Manuel López Obrador's government decided
to scrap plans for an partially built airport project for Mexico
City. Mexico's peso weakened 1.6 percent to see worst
session in more than a week, contrasting with a flat day for
MSCI's index of Latin American currencies. While the U.S. Federal Reserve left rates unchanged, as
markets expected, it said strong jobs and spending was keeping
the economy on track, setting the stage for a rate hike in
December. Mexico's equity benchmark slid 5.8 percent, far
exceeding a 2.8 percent fall in MSCI's index of Latin American
stocks, the regional benchmark's worst day in
two and a months. Grupo Financiero Banorte slumped nearly 12
percent to see their worst day in more than nine years, while
Banco Santander Mexico dropped 8.1 percent. "If you take a look at how the banks in the Mexican stock
exchange have traded, that tells you a lot!," said Andres Jaime,
an EM quant strategist with Morgan Stanley. "It seems from a technical point of view, a lot of them (the
proposals) don't necessarily make sense, that is why the market
is worried. When you have such combinations, the probability of
a policy mistake is much higher – policy mistakes are
expensive." Brazil's real weakened 0.8 percent while the Bovespa
stock index dropped 2.4 percent as all sectors fell. Shares of state controlled oil firm Petrobras
fell 3.6 percent, with Brent oil prices declining 1.8
percent. One of the Bovespa's top losers was Estacio Participacoes SA
, down 8.4 percent. Morgan Stanley cuts its target
price on the educational services provider by about a tenth to
32.9 reais a share. Despite a strong dollar, Argentina's peso firmed
about 0.5 percent. Central bank chief Guido Sandleris said the
country was close to striking a new currency exchange deal with
China, worth the equivalent of $8.7 billion. Key Latin American stock indexes and currencies at 2146 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 993.53 -0.44 -14.24 MSCI LatAm 2642.91 -2.82 -6.55 Brazil Bovespa 85620.13 -2.39 12.07 Mexico IPC 44190.25 -5.81 -10.46 Chile IPSA 5227.57 0.12 0.12 Argentina MerVal 30736.41 -2.13 2.23 Colombia IGBC 12432.06 -0.79 9.33 Currencies daily % YTD % change change Latest Brazil real 3.7603 -0.60 -11.89 Mexico peso 20.1840 -1.59 -2.40 Chile peso 677.3 -0.19 -9.25 Colombia peso 3151.08 -0.76 -5.37 Peru sol 3.364 -0.06 -3.78 Argentina peso 35.4500 0.65 -47.53 (interbank) (Reporting by Aaron Saldanha in Bengaluru; editing by Diane
Craft) 

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/iZvG8duw1tA/emerging-markets-latam-stocks-pulled-lower-by-mexico-peso-drops-against-dollar-idUSL2N1XJ1TB