March 18, 2019 / 9:38 PM / 4 months ago

EMERGING MARKETS-Latam stocks rise, FX firms as Brazil stocks scale new highs

 (Recasts throughout, updates prices)
    By Susan Mathew
    March 18 (Reuters) - Latin American stocks surged on Monday
with Brazil stocks scaling new highs and Argentine shares
jumping 3 percent, while regional currencies firmed ahead of the
U.S. Federal Reserve's meeting later week when it is expected to
affirm its "patient" stance.
    MSCI's index of Latin American shares hit a
three-week high, up 0.8 percent, while its regional currency
index climbed 0.3 percent as the dollar
weakened. 
    The greenback fell as weak data last week lent further
support to the bank's recent accommodative stance. "The Fed
meeting should reinforce the dovish overtures made since the
start of the year," said Mazen Issa, a senior FX strategist at
TD Securities. 
    This boosted developing world currencies which had seen
significant outflows last year due to the steady rise in U.S.
borrowing rates.   
    Brazil's real rose 0.6 percent with investors eyeing
decisions of the Fed and the local central bank, as well as
President Jair Bolsonaro's visit to the United States. Market
participants expect a possible investment agreement between the
two countries.
     Brazil's central bank is expected to keep rate unchanged at
6.5 percent and will likely be on hold for the rest of the year,
a Reuters poll showed.
    While focus still remains on the passing of pension reforms,
the day's moves reflect global risk-on sentiment, said Rafael
Passos, an analyst at Guide Investments.    
    Stocks in Sao Paulo climbed 0.9 percent to yet
another all-time high, with losses in iron ore miner Vale
 limiting gains. Vale lost after announcing further
output cuts.
    The benchmark surpassed Friday's record high and breached
100,000 this session before closing at 99,785.36. 
    On Monday, Bridgewater Associates, the world's largest hedge
fund, said it has turned bullish on Brazil, arguing that
economic growth relative to potential will be the strongest in
the world over the next year.
    Argentine stocks jumped 3 percent and clocked their
best session in more than 10 weeks, while the peso
slipped after three straight sessions of gains that were spurred
by the measures and promises by the government and central bank
to support the currency.
    Mexico's peso rose for the sixth session in seven, up
0.8 percent at a three-week high against the dollar. Mexican
stock markets were closed for trading for a local holiday.
    The Mexican government will invite four firms to bid on the
construction of an $8 billion refinery for debt laden state oil
company Pemex, officials said, aimed at helping the country wean
off growing fuel imports. 
        
    Key Latin American stock indexes and currencies at 2055 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1069.26      1.13
                                        
 MSCI LatAm                    2874.15      0.82
                                        
 Brazil Bovespa               99993.92      0.86
                                        
 Mexico IPC                   42210.46      1.04
                                        
 Chile IPSA                    5324.40      0.01
                                        
 Argentina MerVal             34939.30      2.97
                                        
 Colombia IGBC                13107.66      1.35
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.7913     0.591
                                        
 Mexico peso                   19.0500     0.797
                                        
 Chile peso                      665.8      0.51
                                        
 Colombia peso                 3,098.5     0.678
 Peru sol                        3.299     -0.03
                                        
 Argentina peso                39.9770      -.04
 

 (Reporting by Susan Mathew in Bengaluru; Editing by Lisa
Shumaker)
  
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