January 11, 2019 / 10:01 PM / 7 days ago

EMERGING MARKETS-Latam stocks end week higher; FX buoyed by Fed's cautious stance

 (New throughout, adds market commentator's quote)
    By Agamoni Ghosh
    Jan 11 (Reuters) - Latin American stocks slid amid profit
taking on Wall Street on Friday, but were on pace to log a
positive week with Brazil's Bovespa hitting record highs. 
    Currencies in the region fell against a firm dollar, but
crept toward weekly gains.
    MSCI's index for Latin American stocks
logged gains for a fourth straight week, boosted this week by
hopes that the China-U.S. trade tensions would ease and that the
U.S. Federal Reserve will be patient on raising interest rates. 
    Brazil's benchmark index Bovespa hit several record
highs during the week approaching the 94,000 mark, as President
Jair Bolsonaro's proposed reforms buoyed investor sentiment. 
    Bolsonaro's proposed overhaul of the costly state pension
system announced this week received a thumbs up from markets as
it is perceived to be one of the main causes of chronic budget
deficits and mounting public debt.
    "The real and Bovespa already reflect successful
delivery of the significant pension reform," Credit Suisse 
analysts said in a note.
    Shares of planemaker Embraer reached their best
price since July last year on Friday following the Brazilian
government's authorization of Embraer's agreement with Boeing Co
 the previous day after market close.
    Stock markets in Mexico, which fell 0.2 percent on
the day, logged their best week since August last year, while
the benchmark index in Chile registered its best
week since December 2017.
    Buenos Aires' stock index Merval lost strength on
selective profit taking and fell 0.8 percent on the day, led by
declines in shares of banks, but delivered a third straight week
of gains. 
    Most currencies in the region were set to end the week
higher with Colombia's peso leading gains as the dollar
was on pace to lose for a fourth straight week, having been
especially hit this week by the Fed expressing caution about
raising borrowing costs in the United States.
    "The gradual increase in interest rates in the United States
can be stopped at any moment," said Fernando Bergallo, director
of FB Capital's currency board, noting the positive effect of
the U.S. central bank statement.
    Mexico's peso was set to deliver its seventh straight
week of gains, partly aided by higher crude prices through the
week, but caution remained over gasoline shortages. The central
bank warned about negative effects on the economy and inflation
if the crisis persisted.
    Chile's peso posted a slight advance against the
dollar on the day and closed at its highest level in more than
five weeks, driven by an advance in the price of copper, the
country's main export. 

    Latin American stock indexes and currencies at 2130 GMT

 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1001.11      0.24
                                          
 MSCI LatAm                      2817.50     -0.55
                                          
 Brazil Bovespa                 93658.31     -0.16
                                          
 Mexico IPC                     43583.88     -0.19
                                          
 Chile IPSA                      5352.88      1.04
                                          
 Argentina MerVal               33884.60     -0.83
                                          
 Colombia IGBC                  11621.44     -0.06
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.7110     -0.08
                                          
 Mexico peso                     19.1384      0.08
                                          
 Chile peso                        674.5      0.10
                                          
 Colombia peso                   3136.15     -0.02
 Peru sol                          3.347     -0.18
                                          
 Argentina peso (interbank)      36.8700      0.62
                                          
 

 (Reporting by Agamoni Ghosh in Bengaluru; Additional Reporting
by Claudia Violante in Sao Paulo; editing by Grant McCool)
  
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