February 13, 2019 / 1:50 PM / 2 months ago

EMERGING MARKETS-Brazil stocks rise on trade hopes; Latam currencies dip

    By Agamoni Ghosh
    Feb 13 (Reuters) - Stocks in Brazil rose on Wednesday, in
line with its emerging market peers, as investors welcomed a
possible trade truce extension between the United States and
China, while Latin American currencies weakened as the dollar
recouped earlier losses. 
    U.S. Treasury Secretary Steven Mnuchin said on Wednesday he
hoped for "productive" trade meetings in China this week, a day
after President Donald Trump said he could let a March 1
deadline for a trade agreement with China "slide."
    The news cheered global equity markets, including emerging
market stocks, which were hurt last year by a strong
dollar.
    Bank of America Merrill Lynch said on Tuesday investors saw
emerging markets as the "most crowded" trade, ahead of the U.S.
dollar and technology stocks amid growing worries about rising
corporate debt, falling inflation and weaker global economic
growth.
    "Perhaps over the short-term horizon if the Fed pause is
accompanied by relatively subdued trade tensions between the
U.S. and China emerging markets will remain in vogue," said
Piotr Matys, emerging markets FX strategist at Rabobank.
    "However, EMs tend to perform at their best when the outlook
for the global economy is positive as witnessed throughout 2017
and until early 2018," he added.
    Shares on the Bovespa climbed 0.3 percent, led by
the energy sector as oil prices rose after top exporter Saudi
Arabia said it would cut crude exports and deliver a deeper cut
to its production.
    The biggest gainer on the index was state-run oil firm
Petrobras, rising over 3 percent, while the biggest
drag was BRF Foods as it recalled almost 500 tonnes
of fresh chicken products citing possible salmonella
contamination.
    Focus was also on the possible discharge of President Jair
Bolsonaro from hospital following surgery and post-operative
infection, which raised hopes for acceleration in the
government's reform agenda, in particular pension reforms.

    In currencies, Mexico's peso and Brazil's real
both slid about half a percent against the U.S. dollar while
Chile's peso was marginally higher.   
    Market participants in the region also watched developments
in Venezuela where advisors to self-declared president, Juan
Guaido, have proposed he appoint six executives to a
transitional board for U.S. refiner Citgo Petroleum Corp
           ,the crisis-struck nation's most important foreign
asset. 

    Key Latin American stock indexes and currencies at 1330 GMT
    
    
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1042.76      0.06
                                          
 MSCI LatAm                      2856.42     -0.02
                                          
 Brazil Bovespa                 96420.02      0.36
                                          
 Mexico IPC                            -         -
                                          
 Chile IPSA                      5392.25      0.14
                                          
 Argentina MerVal                      -         -
                                          
 Colombia IGBC                         -         -
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.7294     -0.47
                                          
 Mexico peso                     19.3620     -0.58
                                          
 Chile peso                       660.11      0.05
                                          
 Colombia peso                         -         -
 Peru sol                              -         -
                                          
 Argentina peso (interbank)            -         -
                                          
 
    
    

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Bernadette
Baum)
  
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