March 28, 2019 / 9:48 PM / 3 months ago

EMERGING MARKETS-Latam up, Brazil markets stage comeback

 (Recasts throughout, updates prices)
    By Susan Mathew
    March 28 (Reuters) - Latin American markets rose on Thursday
recovering from last session's steep falls as Brazil markets
jumped with the country's political top brass trying to assuage
investors after rising uncertainty around crucial economic
reforms had sparked a sell-off on Wednesday.
    Brazil stocks rose 2.7 percent on broad-based gains,
after losing 3.6 percent in the previous session, while the real
 finished up 2.4 percent rebounding from Wednesday's
almost 3 percent dive. Both posted their best day since Jan. 2. 
    Tensions around the reforms emerged as President Jair
Bolsonaro was seen as not doing enough to push through the
pension reform as its made its way through Congress, with House
Speaker Rodrigo Maia's being openly critical of the leader.
    The political finger pointing that ensued hurt markets as
the Bolsonaro government seemed to be losing its momentum. On
Thursday, Bolsonaro, Economy Monster Paulo Guedes and Maia
publicly buried the hatchet, aiding a rebound in markets.

    But, analysts were not convinced by the apparent patch up,
and warned that volatility may continue till the reforms get
passed.
    "In spite of volatility and all the noise, there does not
seem to be any substantial change in the local scenario," said
strategist Dan Kawa, a partner at TAG Investimentos, in note to
customers.
    Investors seemed to look past the local central bank cutting
the country's 2019 economic growth forecast, and data showing
Brazil's trade balance swung to deficit in February from the
previous month.
    A host of strong results also helped boost the benchmark
Bovespa index.
    Mexico's peso was little change, having hit session
highs of about 0.3 percent, or 19.295 per dollar, after the
central bank stood pat on its key rate, as expected.

    The bank, however, did flag rating risks to crisis-hit
state-oil firm Pemex and to Mexico's sovereign debt. 
    Mexican stocks, which were the only gainers among
regional shares on Wednesday, ended marginally lower. 
    The Argentine peso rose, breaking a seven-session
losing streak, as the central bank announced new measures to
allow banks to invest more in high-interest Leliq short-term
notes, which should boost peso deposits by encouraging higher
rates for depositors.
    But, Matías Roig, director of Portfolio Personal
Inversiones, expects volatility to continue, saying focus will
not just be on stabilizing the peso but also on the government
to find measures to handle it. He said that uncertainty going
into elections in October might also add to large swings.

    Among other markets, a cautious rise in world shares on
signs of progress in U.S.-China trade talks helped regional
stock indices. Stocks in Argentina rose 2.2 percent,
while those in Chile shares tacked on 0.8 percent.  
    
    Key Latin American stock indexes and currencies at 2100 GMT:
    
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1045.21      0.11
                                        
 MSCI LatAm                    2686.40      1.44
                                        
 Brazil Bovespa               94388.94       2.7
                                        
 Mexico IPC                   42942.23     -0.01
                                        
 Chile IPSA                    5214.02      0.77
                                        
 Argentina MerVal             32902.18      2.26
                                        
 Colombia IGBC                12917.83      0.02
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.9005       2.4
                                        
 Mexico peso                   19.3350     0.105
                                        
 Chile peso                      683.2     -0.07
                                        
 Colombia peso                 3173.45      0.01
 Peru sol                         3.32     -0.09
                                        
 Argentina peso                43.6300      0.62
 (interbank)                            
                                        
 

 (Reporting by Susan Mathew in Bengaluru; Addtional reporting by
Paula Arend Laier in Sao Paulo, and Walter Bianchi and Jorge
Otaola in Buenos Aires; Editing by Sandra Maler)
  
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