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Latin America markets reel
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August 11, 1998: 11:01 a.m. ET
Mexican and Brazilian stocks tumble as Dow beats a rapid retreat
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NEW YORK (CNNfn) - Wall Street's relentless sell-off dealt a body blow to Latin American markets early Tuesday amid widening concerns over instability in Russia and Asia and its potential to spark a global recession.
After half an hour of trade, Mexico's leading IPC index had nosedived 5.063 percent to 3,542.58 points on thin volume of 4.5 million shares. The drop extended an early slide triggered by the yen's plunge to an eight-year low against the dollar and the wholesale equity dumping on Wall Street.
By 11:00 am, the Dow Jones industrial average had fallen about 2 percent to below 8,400.
Meanwhile, Brazil's key Bovespa index tumbled more than 5.4 percent to 8,685, dragged down by the declining fortunes in emerging markets elsewhere.
"It's certainly unpredictable as to how long this is going to go, and how deep it is going to be and what the impact will be," Tom Schlesinger, an equity strategist with A.G. Edwards, told CNNfn.
Much of the Latin American panic, analysts said, seemed to stem from far-away volatility in Russia, where debt and stocks plummeted anew Tuesday amid fresh concerns over the country's ability to fend off further financial erosion.
The leading Russian market index slid to its lowest level since May 1996 as Treasury bill yields soared to 115-120 percent for long- and medium-term paper from 95-100 percent Monday.
The anxiety was mirrored in the currency market. The Brazilian real softened to 1.1708 to the dollar in morning trade from 1.1689 at Monday's close.
It subsequently firmed to 1.1685, with dealers attributing the rise to Banco do Brasil selling dollars on behalf of the Central Bank. 
-- from staff and wire reports
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