August 3, 2018 / 4:34 PM / 4 months ago

EMERGING MARKETS-Brazil stocks lead gains on Petrobras profit, election hopes

    By Bruno Federowski
    BRASILIA, Aug 3 (Reuters) - Brazilian stocks led gains in
Latin America after state-controlled oil company Petróleo
Brasileiro SA reported a larger-than-expected jump in quarterly
net profit.
    Rising oil prices and diesel subsidies allowed Petrobras, as
the firm is known, to boost its market share, driving up its
shares by more than 5 percent.
    That was the largest increase since May 23 when its former
chief executive officer, Pedro Parente, voluntarily cut diesel
prices in a bid to defuse a nationwide truckers' protest over
rising fuel costs that paralyzed Latin America's top economy.
    Also helping to lift sentiment were hopes that Senator Ana
Amélia Lemos could run as center-right presidential candidate
Geraldo Alckmin's running mate after she said she was close to
agreeing to that plan late on Thursday.
    Igor Lima, a partner at Galt Capital, said that could boost
Alckmin's clout among women as well as in the southern region.
    Traders have taken a cautious stance ahead of October's
presidential elections, the most hard-to-predict in decades.
Many fear the winner of the vote could turn his back to a
platform of deregulation and belt-tightening that they see as
critical to bring back Brazil's investment grade rating.
    The benchmark Bovespa stock index was up 2.2
percent, by far the largest gainer in the region, while the
Brazilian real led the advance in currency markets by
rising 1.2 percent.
    Latin American currencies were up across the region,
however, after the U.S. government reported a braking of
domestic job growth, as employment in the transportation and
utilities sectors fell.
    That could drive the U.S. Federal Reserve to raise interest
rates at a slower-than-expected pace, bolstering demand for
high-yielding assets.
    
    Latin American stock indexes and currencies at 1615 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
                                  Latest              
 MSCI Emerging Markets              1075.08     0.72   -7.86
 MSCI LatAm                         2750.11     2.23   -4.88
 Brazil Bovespa                    81397.79     2.21    6.54
 Mexico IPC                        49339.39     0.58   -0.03
 Chile IPSA                         5429.47     0.81   -2.43
 Chile IGPA                        27366.78     0.83   -2.19
 Argentina MerVal                  29412.54     1.83   -2.17
 Colombia IGBC                     12102.18    -0.32    6.43
                                                            
 Currencies                                  daily %   YTD %
                                              change  change
                                     Latest           
 Brazil real                         3.7113     1.20  -10.72
 Mexico peso                        18.5800     0.35    6.02
                                                      
 Chile peso                          643.65     0.18   -4.51
 Colombia peso                      2896.05     0.25    2.97
 Peru sol                             3.268     0.15   -0.95
 Argentina peso (interbank)         27.3100     0.59  -31.89
                                                      
 Argentina peso (parallel)               28     0.54  -31.32
                                                      
 
 (Reporting by Bruno Federowski;editing by Grant McCool)
  
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