Latin American stocks were flat on Monday, partly subdued by delays in important pension reform in Brazil, while currencies in the region rose against a weak dollar but Argentina's peso hovered around record-low levels on political uncertainty and the highest country risk so far this year.
MSCI's index of Latin American stocks was little changed with stocks in Colombia's IGBC index leading gains. Sao Paulo-traded stocks rose for a third straight day led by shares of energy companies as oil prices hit five-month highs.
Brazil's Petrobras was among the top gainers after the state-controlled oil firm agreed to sell 90% of its Associated Gas Carrier (TAG) unit for US$ 8.6 billion to French utility firm Engie to helps cut debts.
Focus also remained on Brazil's social security reform, but investors are worried about a delay and changes made to the original pension reform promised by President Jair Bolsonaro.
An opinion poll by DataFolha released on Sunday shows Bolsonaro is facing the lowest approval rate for a first-term Brazilian president through 100 days among all elected predecessors since the country's return to democracy in the late 1980s.
Although the external environment is helping Brazil, focus is still on the political landscape, said Guilherme Foureaux, partner and portfolio manager at Paineiras Investimentos.
Argentina's peso recovered slightly from a record low hit on Friday as lower interest rates on peso-denominated bonds combined with political and economic uncertainty continue to put pressure on the currency.
The International Monetary Fund said although Argentina's economy would likely contract at a lower rate than previously forecast, the October presidential election was the most visible near-term risk, and could raise market anxiety and lead to larger-than-expected peso outflows.
The IMF's executive board ratified its third review of Argentina's economic progress under a major financing deal agreed last year, unlocking a roughly US$ 10.8 billion tranche of funds.
The Argentine stock exchange index Merval was up 1.3% pushed by financial and energy shares, but the country risk ballooned 21 points to settle at 803 points, its highest since last December and not far from the record 840 during the current administration of president Mauricio Macri.