World Cup seen slowing Latam market trade

NEW YORK, June 10 (Reuters) Latin America's fixation with World Cup football over the next month is likely to hit volumes in regional financial markets, but opinions differ on whether it will cool the volatility that has rocked emerging markets.

With Brazil markets closing early on game days, Argentina's stock market bringing in a giant TV screen for matches and traders betting electronically in Mexico, investors' attention could drift unless global markets tremble, analysts said.

''Basically we see lower volumes on game days, especially when a country's (team) is playing but also throughout the tournament,'' said Clyde Wardle, HSBC emerging markets analyst.

''It's likely to translate into lower volatility but we could see some quiet spikes, that is you could see large movement but without a large amount of market noise.'' Of the 32 teams in the month-long tournament that opened yesterday in Germany, six are from Latin America.

These include Brazil, Mexico and Argentina -- the region's biggest economies -- which have seen wide swings in the prices of their stocks, bonds and currencies in the past month.

The Brazilian real, the regional bellwether currency, in the past month staged its biggest one-day gain and biggest one-day fall in four years, each more than 4 percent moves, as emerging markets globally were roiled by rising interest rates in the United States, Europe and Asia.

The question is whether the distraction of the World Cup will calm the financial turbulence.

Brazil appears to be the only country which closes its markets early for World Cup games on trading days, scheduled so far on Tuesday June 13 and Thursday June 22.

Lehman Brothers emerging markets analyst John Welch, who worked in Brazil, said trading volumes would definitely fall.

''People will go home. I lived in Brazil for the 1986 World Cup and there was always a pre-game rush hour. No cabs anywhere!,'' he said.

Brazil has won the Cup five times, more than any other country, and is the only country to have qualified for all 17 World Cup tournaments.

POSSIBLE MOOD BOOSTER? Two-time champion Argentina also has matches during trading sessions, including Friday June 16 and Wednesday June 21.

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