September 17, 2018 / 3:56 PM / 3 months ago

EMERGING MARKETS-Options contracts, Petrobras boost Brazilian equities

    SAO PAULO, Sept 17 (Reuters) - Brazil's benchmark Bovespa
equities index rose more than 1 percent in morning trade on
Monday as the expiry of options contracts and moves among some
heavily weighed stocks offset concerns about the outcome of
October's presidential election.
    Monthly options contracts on the Bovespa expire on Monday,
which brought significant volatility to the market, particularly
in morning trade, traders said. Given the technical nature of
the gains, the traders said the Bovespa's rally was relatively
fragile and could be reversed in the afternoon.
    While gains were evenly distributed - only eight Bovespa
stocks were in the red at mid-day - some particularly heavily
weighted equities helped buoy the index.
    Shares in food processor BRF SA soared more than
6 percent after Goldman Sachs analyst Luca Cipiccia raised his
recommendation on the stock to "buy" from "hold" and hiked his
price target on the stock to 30.80 reais from 19 reais,
previously.
    Preferred and common shares in
state-run oil company Petroleo Brasileiro SA, known as
Petrobras, both climbed about 1.5 percent amid heavy options
trading and a Reuters interview in which the firm's chief
financial officer gave 2019 oil production targets.
    Overall, the Bovespa climbed 0.89 percent in mid-day
trade. 
    It had risen well more than 1 percent earlier, despite
opinion polls showing that a presidential election run-off
between the hard-right and hard-left candidates is increasingly
likely.
    "With the growth of Fernando Haddad's candidacy and Ciro
Gomes staying at the same levels, time is running out every day
for the other candidates to make the run-off," analysts at BTG
Pactual wrote in a note to clients, referring to two leftist
candidates who have spooked markets.
    One of the two is seen as increasingly likely to face
hard-right Jair Bolsonaro in a run-off.
    Across Latin America, currencies climbed modestly against
the dollar, with the exceptions being the Peruvian sol,
which was off 0.12 percent against the dollar in morning trade.
    Political tensions are rising in Peru after President Martin
Vizcarra dared lawmakers to dismiss the entire cabinet late on
Sunday, a move which could, under Peru's constitution, lead to
Vizcarra dissolving Congress.
    
    Latin American stock indexes and currencies at 1512 GMT:  
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1028.53      1.07    -11.21
                                                  
 MSCI LatAm                    2435.50      0.32    -13.88
                                                  
 Brazil Bovespa               76103.67      0.89     -0.39
                                                  
 Mexico IPC                   49617.56      0.01      0.53
                                                  
 Argentina MerVal             30537.65      1.19      1.57
                                                  
 Colombia IGBC                12305.48       0.3      8.22
                                                  
 Venezuela IBC               368436.28      0.38  29068.29
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    4.1554      0.26    -20.27
                                                  
 Mexico peso               18.8513       -0.17        
                                                  
 Chile peso                      686.8      0.00    -10.51
                                                  
 Colombia peso                 3012.73      0.25     -1.02
 Peru sol                        3.315     -0.12     -2.35
                                                  
 Argentina peso                39.5600      0.78    -52.98
 (interbank)                                      
                                                  
 Argentina peso                  38.75      0.65    -50.37
 (parallel)                                       
                                                  
 

 (Reporting by Paula Arend Laier and Gram Slattery; Additional
reporting by Flavia Bohone; editing by Grant McCool)
  
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