March 21, 2018 / 10:30 PM / a month ago

EMERGING MARKETS-NAFTA optimism boosts Mexican markets

 (Updates prices, adds NAFTA comments and Fed rates decision)
    MEXICO CITY, March 21 (Reuters) - Mexico's currency
strengthened on Wednesday in its biggest daily gain since last
June, buoyed by growing bets that the United States could soften
its stance on regional NAFTA trade negotiations looming over the
fortunes of Mexican exporters.
    Mexican infrastructure, real estate and automotive stocks
also climbed, fueled by hopes that talks to renegotiate the
North American Free Trade Agreement (NAFTA) could edge closer to
a conclusion after dragging on longer than expected.
    U.S. Trade Representative Robert Lighthizer on Wednesday
said that talks with Canada and Mexico were "starting to
converge" on auto content requirements, while Canadian Prime
Minister Justin Trudeau said a successful renegotiation was
likely.
    The peso was up nearly 2 percent, far outpacing
gains among other Latin American currencies.
    In a report, Grupo Banorte cited "speculation of a looser
stance and the prospect of a swift agreement" as driving sharp
gains.
    Mexico's benchmark S&P/BVM IPC stock index jumped
around 1 percent on a day when MSCI's emerging market index
 was nearly flat.
    The market advances suggest that concerns are fading that
U.S. President Donald Trump's protectionist leanings could
threaten Mexico, which sells around four-fifths of its exports
to the United States.
    Shares of auto parts maker Nemak SAB de CV and
its controlling shareholder Alfa SAB de CV rose
around 4 percent, putting them among the top IPC gainers. 
    Optimism over the NAFTA talks outshone a cautious stance in
broader emerging markets after the U.S. Federal Reserve on
Wednesday afternoon raised interest rates and forecast at least
two more hikes for 2018.
    
    Key Latin American stock indexes and currencies at 2058 GMT:
    
 Stock indexes               Latest        Daily  YTD pct
                                             pct   change
                                          change  
 MSCI Emerging Markets         1,209.62    -0.02     4.42
                                                  
 MSCI LatAm                    3,047.91     1.21     7.77
 Brazil Bovespa               84,976.59     0.97    11.22
 Mexico IPC                   47,521.84     0.95    -3.71
 Chile IPSA                    5,535.49    -0.13    -0.52
 Chile IGPA                   27,751.47    -0.13    -0.82
 Argentina MerVal             32,369.59      1.8     7.66
 Colombia IGBC                11,640.74     0.85     2.38
 Venezuela IBC                 6,468.20   -12.84   412.07
                                                         
 Currencies                      Latest    Daily  YTD pct
                                             pct   change
                                          change  
 Brazil real                     3.2720    -0.13     1.26
 Mexico peso                    18.4325     1.83     6.87
 Chile peso                       603.8     0.93     1.80
 Colombia peso                 2,853.75     0.57     4.49
 Peru sol                         3.251     0.43    -0.43
 Argentina peso (interbank)     20.2625     0.01    -8.20
                                                  
 Argentina peso (parallel)        20.93     0.19    -8.12
                                                  
 
 (Reporting by Bruno Federowski in Sao Paulo and Daina Beth
Solomon in Mexico City, Editing by Rosalba O'Brien)
  
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