September 4, 2019 / 8:25 PM / 6 months ago

EMERGING MARKETS-Global risk-on mood lifts Latam markets, Argentine peso ends flat

 (Updates with market closing price)
    By Sruthi Shankar
    Sept 4 (Reuters) - Latin American currencies and stocks rose
on Wednesday as cooling political tensions in Hong Kong and
Italy prompted inflows into risky assets, helping keep Argentine
markets steady after the newly imposed capital controls.
    Emerging markets were also helped by British lawmakers
approving a law to delay taking Britain out of the European
Union without a deal, which brought buyers back to equity
    The MSCI index of Latin American currencies
jumped 1.3%, coming off one-year lows as the U.S. dollar fell
against a basket of major currencies.
    Argentina's peso closed down 0.07% to 56.02 per
dollar after holding largely unchanged through the session as
traders said the central bank sold more dollars to support the
peso. The currency also gained in black market trading.
    Bond rose, while the Merval stock index rebounded
from sharp falls on Tuesday, gaining about 7%.
    The markets stabilized even as thousands of protesters took
to the streets to demonstrate against the government of
President Mauricio Macri as the country reels under a financial
    "We expect spot (FX rate) to be stable. More stringent
controls will likely be forthcoming if spot comes under further
pressure," Citi's Dirk Willer wrote in a client note.
    The peso, bonds and equities have tumbled since Macri was
pummeled in primary elections in August, forcing the government
to unveil plans to delay payments on around $100 billion of
debts as well as the currency controls.
    Brazil's real jumped 1.5% leading gains among
regional currencies, while the Mexican peso and the
Colombian peso gained 0.9% and 1.4% each as oil prices
rallied 4% after upbeat services sector data from China.  
    Chile's peso was only marginally higher,
underperforming its regional peers after the central bank cut
its key interest rate by 50 basis points on Tuesday as inflation
levels continue to drag for the world's top copper exporter.    
    Latin America's top currencies are poised to remain weak in
coming months as central banks in Brazil and Mexico keep easing
to revive growth, with worries over Argentina's financial
condition adding to a softer trend, a Reuters poll showed.
    Sao Paulo-traded stocks rose over 1%, as higher oil
prices boosted shares in state-owned oil firm Petrobras
. Brazil's Senate approved an amended transfer of
rights agreement, settling a dispute over pre-salt oil fields
between the government and the company.
    Indices in Mexico, Chile and Colombia
, all gained between 0.2% and 0.8%, putting an index of
Latin American stocks on track for its biggest
percentage gain since mid-March.    

  Key Latin American stock indexes and currencies at 1935 GMT:
   Stock indexes           Latest    Daily %
 MSCI Emerging Markets       991.14     1.84
 MSCI LatAm                 2609.04     2.42
 Brazil Bovespa           100991.63     1.31
 Mexico IPC                42187.52     0.86
 Chile IPSA                 4743.50     0.64
 Argentina MerVal          24578.69    6.497
 Colombia IGBC             12663.04     0.17
      Currencies           Latest    Daily %
 Brazil real                 4.1039     1.83
 Mexico peso                19.7685     1.03
 Chile peso                  723.02     0.34
 Colombia peso               3393.2     1.40
 Peru sol                     3.378     0.77
 Argentina peso             56.0000    -0.04
 (Reporting by Sruthi Shankar in Bengaluru; Editing by Lisa
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