December 13, 2016 / 11:50 PM / 8 months ago

EMERGING MARKETS-Brazil currency, stocks up as Senate approves spending cap

(Updates with closing prices, approval of austerity measure)
    By Bruno Federowski
    SAO PAULO, Dec 13(Reuters) - Brazil's currency and stocks
rose on Tuesday as lawmakers approved a key austerity measure,
though there was some retrenchment by investors in Mexico ahead
of an expected interest rate hike by the U.S. Federal Reserve.
    The Brazilian Senate broadly backed a constitutional
amendment limiting growth in public spending, a major step in
President Michel Temer's plan to curb public debt. 
    The real strengthened 0.6 percent, outperforming most of its
Latin American peers. The country's benchmark Bovespa stock
index edged up 0.17 percent, with shares of education
company Kroton SA rising more than 5.5 percent.
    Analysts with JPMorgan Securities increased their
recommendation on the stock to "overweight," saying a 24 percent
underperformance compared with the benchmark index over the past
six months might be overdone. 
    Mexico's peso fell more than 0.3 percent against the
greenback and the IPC share index dipped by 0.09 percent as
investors waited for the Fed's monetary policy decision on
Wednesday, when the bank is widely expected to hike rates.
    Most Latin American markets were fairly steady, and many
traders said the Fed hike was already priced in. However, there
are doubts over whether it will send a strong signal that
additional increases are to come.

    Key Latin American stock indexes and currencies at 2310 GMT:
 Stock indexes                     Latest        Daily  YTD pct
                                                   pct   change
                                                change  
 MSCI Emerging Markets                 877.20     0.57    10.46
 MSCI LatAm                          2,334.65     0.45    27.59
 Brazil Bovespa                     59,280.57     0.17    36.75
 Mexico IPC                         46,870.24    -0.09     9.06
 Chile IPSA                          4,272.48     0.71    16.09
 Chile IGPA                         21,325.33     0.54    17.49
 Argentina MerVal                   17,197.47     0.23    47.30
 Colombia IGBC                       9,979.23     0.91    16.75
 Venezuela IBC                      34,991.64    -3.74   139.86
                                                               
 Currencies                            Latest    Daily  YTD pct
                                                   pct   change
                                                change  
 Brazil real                            3.326     0.59    18.67
 Mexico peso                           20.283    -0.32   -15.05
 Chile peso                             650.8    -0.25     9.05
 Colombia peso                          2,970     0.67     6.71
 Peru sol                               3.394     0.18     0.59
 Argentina peso (interbank)           15.9650     0.42   -18.68
                                                        
 Argentina peso (parallel)              16.31     0.12   -12.51
                                                        
 
 (Reporting by Brunno Federowski, editing by G Crosse)

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