October 23, 2017 / 3:03 PM / in a year

EMERGING MARKETS-Argentina markets jump on election boost

    By Bruno Federowski
    SAO PAULO, Oct 23 (Reuters) - Argentina's stocks, bonds and
currency jumped on Monday as investors bet a strong electoral
performance from President Mauricio Macri's coalition could
boost his reform agenda.
    While "Let's Change" will remain a minority in the lower
house of Congress and the Senate, as expected, its defeat of
populist former President Cristina Fernandez in the Senate race
in populous Buenos Aires province and strong performance
nationwide should help in negotiations with opposition
lawmakers, analysts said.
    Investors expect that momentum will help it pass its 2018
budget, which aims to cut the fiscal deficit by one percentage
point to 3.2 percent of gross domestic product, along with tax,
labor and capital markets reforms.
    "A very solid electoral performance by President Macri,
which should endow the administration with a stronger mandate to
purse his reformist agenda," Goldman Sachs economist Alberto
Ramos wrote in a report.
    "The strong showing by President Macri increases the
probability of a reelection in 2019, giving continuity to the
current market and investment-friendly set of policies."
    Argentina's benchmark Merval index rose 1.9 percent
to new all-time highs, while the peso firmed 0.9
percent. Dollar bonds jumped 1.8 percent.
    Brazilian markets, however, slipped as investors avoided
risky bets ahead of a widely-expected vote in the lower house of
Congress on whether to put President Michel Temer on trial
before the Supreme Court for corruption charges.
    Traders see Temer dodging the charges but the vote may
corrode his political capital, potentially delaying the
implementation of a plan to streamline the pensions system seen
as key to boosting long-term growth.
    Common shares in phone carrier Oi SA, which are
not part of the benchmark index, slumped 4 percent after
regulators rejected a proposal to swap billion of reais in
regulatory fines for new investments as part of its debt
reorganization plan.
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                                 daily %   YTD %
                                      Latest    change  change
 MSCI Emerging Markets                1116.73    -0.26   29.85
 MSCI LatAm                           2904.95    -0.82   25.13
 Brazil Bovespa                      75905.53    -0.63   26.03
 Mexico S&P/BVM IPC                  49749.14    -0.48    9.00
 Chile IPSA                           5523.77        0   33.06
 Chile IGPA                          27685.59     0.05   33.53
 Argentina MerVal                    27484.57     1.87   62.46
 Colombia IGBC                       10941.14     0.34    8.03
 Venezuela IBC                         621.53     5.59  -98.04
 Currencies                                    daily %   YTD %
                                                change  change
 Brazil real                           3.2092    -0.65    1.25
 Mexico peso                          19.0085    -0.11    9.13
 Chile peso                            630.35    -0.23    6.40
 Colombia peso                         2943.3    -0.38    1.98
 Peru sol                               3.237     0.03    5.47
 Argentina peso (interbank)           17.2900     0.87   -8.18
 Argentina peso (parallel)              17.93     0.45   -6.19
 (Reporting by Bruno Federowski; Editing by Nick Zieminski)
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