Latin American 2025 stocks estimates cut amid correction worries
By Gabriel Burin and Noe Torres
BUENOS AIRES/MEXICO CITY, Nov 26 (Reuters) -Latin American stock estimates for 2025 have been cut due to increasing uncertainty about Mexico's outlook and Brazil's public finances, amid concerns of a possible correction in the near-term, a Reuters poll found.
Those downgrades add to a mediocre performance of market indexes in both countries that are trading close to levels seen one year ago, in contrast to Wall Street's impressive run since then.
The Mexican IPC stock index .MXX is expected to rise 13.5% to 57,000 points by end-2025 from 50,207.2 on Monday, according to the median estimate of 13 strategists. But the forecast was below a projection of 61,000 points in August's survey.
Estimates were collected Nov. 15-26, before U.S. President-elect Donald Trump, who takes office on Jan. 20, said he would impose a 25% tariff on imports from Mexico until it clamped down on drugs and immigrants.
Investors continue watching closely the potential impact of Trump's planned tariffs, a controversial judicial reform in Mexico, and any hints of possible changes in the U.S.-Mexico-Canada trade pact (USMCA).
"We would consider the next events as critical: the first days of Trump's presidency (1Q25), the voting season for the judicial judges and ministers in Mexico (2Q25), and the starting process revision of the USMCA in 2026," SURA analysts said.
Meanwhile, market players in Brazil are eagerly awaiting the announcement of a fiscal package after the government made a first move by freezing $860 million in spending to keep in line with a zero deficit target this year.
"The future of the (Brazilian) Ibovespa index is conditioned by important cost-cutting steps, as well as stimulus measures in China that could bolster commodity prices, benefiting Brazilian exports," said Volnei Eyng, CEO of Multiplike Gestora.
The Bovespa index, or Ibovespa .BVSP, is set to advance 12.4% to 145,000 points from 129,036.1 on Monday, under the last forecast of 147,500, as stocks experts in the region's two top economies turn more skeptical.
Of 17 respondents who answered a question about the risk of a 10% correction in their local stocks markets early in 2025, eight said it was "likely", and one "highly likely". The other eight viewed it as unlikely or highly unlikely.
In 2024, the Ibovespa is down 3.8% and Mexico's IPC index has fallen 12.5%.
(Other stories from the Reuters Q4 global stock markets poll package)
Reporting and polling by Gabriel Burin in Buenos Aires and Noe Torres in Mexico City, editing by Ed Osmond
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