May 3, 2017 / 9:34 PM / 3 months ago

EMERGING MARKETS-Brazil stocks slip ahead of pension vote

4 Min Read

 (Adds closing market prices)
    By Bruno Federowski
    SAO PAULO, May 3 (Reuters) - Brazilian stocks fell on
Wednesday following a mixed batch of corporate earnings and
ahead of a key vote on an overhaul of the country's pension
system in Congress.
    The benchmark Bovespa stock index slipped 0.94
percent after rising 2 percent on Tuesday, with many traders
taking a cautious stance as a congressional committee prepared
to vote on the planned pension reform.
    Investors see reduced pension spending as crucial to efforts
to rein in public debt and pull Brazil out of its deepest
recession in decades.
    Shares of lender Itaú Unibanco Holding SA weighed
on the index after rising defaults kept it from cutting
loan-loss provisions as much as investors expected in the first
quarter.
    Traders were also disappointed by Itaú's net income, which
came in only slightly above analyst forecasts. Many had bet on
stronger figures after earnings by rival Santander Brasil SA
 handily beat expectations.
    Shares of payment processor Cielo SA also slumped
as declining revenues fueled concerns over its outlook despite
higher-than-expected profits.
    The U.S. Federal Reserve kept interest rates unchanged on
Wednesday and downplayed weak economic growth while emphasizing
the strength of the American labor market, in a sign it was
still on track for two more rate rises this year.
    The Fed's decision did not appear to have a big impact on
currencies in the region. The Brazilian real ended 0.14
percent weaker against the dollar, while the Mexican and Chilean
pesos slipped slightly and the Argentine and Colombian pesos
firmed.
    Traders expect the real to be volatile in coming months on
fears that lawmakers could block key austerity measures, a
Reuters poll showed.
        
 Key Latin American stock indexes and currencies at 2047 GMT:
 Stock indexes                    Latest        Daily  YTD pct
                                                  pct   change
                                               change  
 MSCI Emerging Markets                985.74    -0.25    14.32
 MSCI LatAm                         2,642.48    -0.75     12.9
 Brazil Bovespa                    66,093.78    -0.94     9.74
 Mexico IPC                        49,099.98    -0.99     7.57
 Chile IPSA                         4,854.88    -0.48    17.44
 Chile IGPA                        24,349.26    -0.48    17.44
 Colombia IGBC                     10,202.49    -0.08     0.73
                                                              
 Currencies                           Latest    Daily  YTD pct
                                                  pct   change
                                               change  
 Brazil real                          3.1560    -0.14     2.87
 Mexico peso                         18.8550    -0.49     9.11
 Chile peso                            669.2    -0.15     0.22
 Colombia peso                         2,928     0.38     2.51
 Peru sol                               3.25    -0.06     5.05
 Argentina peso (interbank)            15.28     0.16     3.89
                                                       
 Argentina peso (parallel)             15.84     0.82     6.19
                                                       
 
 (Reporting by Bruno Federowski and Mitra Taj; Editing by Tom
Brown and Jonathan Oatis)
  

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