The recent sell-off across Latin America's financial markets was part of a global flight to quality and has nothing to do with fundamentals in the region. That is the consensus view of investors in Latin America. But once the dust settles, investors will have to take a fresh look at local fundamentals and prospects for growth.

The region's main stock market indices have fallen roughly in unison since the start of last week. Brazilian shares had lost 6.87 per cent by midday trading yesterday, Argentina's 8.2 per cent and Mexico's 7.03 per cent. It was a different story on currency markets. The Mexican and Argentine pesos weakened slightly during that time but the Brazilian real fell 5.65 per cent against the dollar. That might be a clue about Brazil's prospects.