October 1, 2018 / 3:36 PM / 2 months ago

EMERGING MARKETS-Mexican stocks, peso jump on NAFTA deal

    Oct 1 (Reuters) - The Mexican peso and stocks rose on Monday
after a U.S.-Canada trade deal maintained a trilateral agreement
including Mexico, while Brazil's real strengthened ahead of the
first round vote next weekend.
    Investors cheered the 11th-hour deal signed on Sunday that
kept the North America Free Trade Agreement (NAFTA) largely
intact and did not fracture supply chains between weaker
bilateral agreements.
    The Mexican peso strengthened 0.6 percent, scaling a
near two-month high. It last stood at 18.6077 against the
dollar. NAFTA worries had pressured the peso since U.S.
President Donald Trump threatened to renegotiate the deal.
    "Market wise, the agreement is positive news for the peso,"
BBVA analysts said in a note, pointing out that the NAFTA talks
weighed on Mexico more than other emerging markets. Now, "the
risk premium related to NAFTA should tend to ease," they said.
    The Mexican stock index climbed 1 percent to its
highest in more than a month. Shares of auto parts makers
jumped.
    Nemak SAB De CV surged 5.6 percent and was
on-track for its best day since late July, while Rassini SAB de
CV rose 3.8 percent set to post its best session
since early August.
    Meanwhile, Brazil's real gained ahead of the first
round presidential vote on Oct. 7.
    Elections polls show that the first round vote would not see
a majority win by a party, and the consequent second round
run-off may see a win by leftist Fernando Haddad - a result not
preferred by markets.
    But, Haddad, who took over from popular jailed former
president Luiz Inacio Lula da Silva, has met with several
investment firms and banks in recent weeks to quell fears.

    Brazil's Bovespa index, however, fell 1.3 percent as
health insurer Qualicorp tumbled 22 percent. 
    Qualicorp shares plunged after the company said it had
agreed to pay its founder and biggest shareholder 150 million
reais ($37.22 million) in return for a pledge not to sell his
shares or compete with it.
    Elsewhere, Argentina's peso firmed 1.7 percent on the
first day of trade after a deal with the International Monetary
Fund aimed at halting a decline in the currency.
    
    Key Latin American stock indexes and currencies at 1512 GMT:
   
 Stock indexes                                                    daily %  YTD % change
                                         Latest                    change  
 MSCI Emerging Markets                             1046.52          -0.13         -9.54
 MSCI LatAm                                        2559.56          -0.66          -8.9
 Brazil Bovespa                                   78335.89          -1.27          2.53
 Mexico IPC                                       49834.91           0.67          0.97
 Chile IPSA                                        5264.46          -0.36         -0.36
 Argentina MerVal                                 33208.42          -0.76         10.45
 Colombia IGBC                                    12572.38           0.87         10.57
                                                                                       
 Currencies                                                       daily %  YTD % change
                                                    Latest         change  
 Brazil real                                        4.0214           0.37        -17.61
 Mexico peso                                       18.6540           0.29          5.60
 Chile peso                                          655.1           0.38         -6.17
 Colombia peso                                      2997.1          -1.24         -0.50
 Peru sol                                             3.31          -0.18         -2.21
 Argentina peso (interbank)                        40.5000           1.98        -54.07
                                                                           
 Argentina peso (parallel)                            39.5           0.63        -51.32
                                                                           
 
 (Reporting by Susan Mathew in Bengaluru; Editing by David
Gregorio)
  
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