October 22, 2018 / 8:59 PM / 25 days ago

EMERGING MARKETS-Brazil stocks, currency gain; Mexico peso eases

    By Aaron Saldanha
    Oct 22 (Reuters) - Brazilian stocks were Latin America's
biggest gainers on Monday as sentiment toward emerging markets
got a boost from China's promise of stimulus while the Mexican
peso retreated as U.S. President Donald Trump threatened to
close the border to stop a caravan of migrants from Central
America.
    The MSCI index of Latin American stocks rose
0.8 percent, while the wider MSCI emerging market shares index
 rose about 1.2 percent.
    "Markets are in a bit of a state of flux at the moment. It
doesn't take much to scare them. It doesn't take much to provide
relief," said Christian Lawrence, a senior market strategist
with Rabobank in New York.
    "It is mostly because of the 4 percent rally in the Shanghai
(index) which clearly set the tone," he said.
    Brazil's benchmark equity index gained 1.6 percent
as stocks rose across the board. Vale SA added 3.3
percent, helped by Previ's chief executive officer saying the
Brazilian pension fund would not sell shares in the iron ore
miner before year-end.
    Petroleo Brasileiro SA, also known as Petrobras,
was 2.4 percent higher after the state-run oil firm received an
initial payment of 549 million reais ($148.9 million) from a
marine engineering group.
    Brazil's real was 0.75 percent firmer against the
dollar, with Latin America's largest economy headed into a
presidential election run-off on Sunday.  
    Presidential front-runner Jair Bolsonaro on Saturday did not
rule out keeping well-reputed central bank chief Ilan Goldfajn
in the job, despite a report last week that the banker was
preparing to depart by the end of the year.
    Mexico's peso weakened 0.67 percent as Trump has
threatened to close the U.S.-Mexico border as he complained that
Mexican police and military "are unable to stop" the caravan
from moving northward.
    "If Trump does decide to go down that route, then clearly it
poses a risk to Mexico-U.S. relations at time where we are going
to be seeing a (presidential) handover in less than two months,"
said Rabobank's Lawrence.
    Argentina's peso firmed about 0.25 percent after the
country's Treasury minister said the government was on track to
meet its 2018 year-end spending targets.     
    
 Key Latin American stock indexes and currencies at 2015 GMT:   
 Stock indexes                   Latest      Daily   YTD pct
                                              pct     change
                                            change   
 MSCI Emerging Markets              982.86     1.17    -15.16
                                                     
 MSCI LatAm                       2,725.02     0.84     -3.65
 Brazil Bovespa                  85,596.69     1.63     12.03
 Mexico IPC                      46,942.67    -1.04     -4.89
 Chile IPSA                       5,122.51     0.07      0.07
 Argentina MerVal                28,583.62    -0.31     -4.93
 Colombia IGBC                   12,485.45    -0.22      9.80
                                                             
 Currencies                      Latest      Daily   YTD pct
                                              pct     change
                                            change   
 Brazil real                        3.6867     0.00    -10.13
 Mexico peso                       19.3870    -0.67      1.61
 Chile peso                          681.8    -0.19     -9.85
 Colombia peso                       3,081    -0.16     -3.21
 Peru sol                            3.332    -0.03     -2.85
 Argentina peso (interbank)        36.4500     0.25    -48.97
                                                     
 Argentina peso (parallel)           36.25     2.07    -46.95
                                                     
 
 (Reporting by Aaron Saldanha in Bengaluru, editing by G Crosse)
  
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