May 24, 2017 / 9:19 PM / 2 months ago

EMERGING MARKETS-Brazil stocks up on reform hopes, but political woes linger

4 Min Read

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, May 24 (Reuters) - Brazilian stocks rose for a
second day on Wednesday, supported by efforts by President
Michel Temer's government to maintain an ambitious reform agenda
amid growing political unrest.
    Temer's plans to streamline Brazil's pension system cleared
another hurdle in Congress on Tuesday. House speaker Rodrigo
Maia said a vote in the full lower house could take place
between June 5 and June 12, clearing the way for a final Senate
vote.
    The benchmark Bovespa stock index rose nearly 1.0
percent, led by stocks which had suffered deeply since tapes
showing Temer allegedly condoning bribes to silence a witness in
a corruption case went public last week.
    Shares of logistics operator Rumo Operadora Multimodal SA
 rose for a second day, rebounding from a 23.5 percent
three-day drop.
    The interest rate sensitive stock was bolstered by a decline
in yields of interest rate futures as traders pared back bets
that the central bank would be forced to cut rates at a slower
pace than expected.
    Still, concerns over the political environment lingered.
Traders said volatility is likely to remain elevated in the
medium term as the crisis drags on.
    Other Latin American currencies see-sawed on thin trading
volumes ahead of the release of the minutes of the Federal
Reserve's last policy meeting later on Wednesday. 
    The Mexican peso strengthened to its best level since the
election of U.S. President Donald Trump in November, up 0.93
percent, while the Colombian peso was nearly flat.
    Traders have been eagerly seeking hints over the pace of
U.S. rate hikes in coming months after a batch of mixed economic
data cast doubt on expectations of a fast tightening. Higher
U.S. rates could dampen demand for high-yielding emerging market
assets.
    
    Key Latin American stock indexes and currencies at 2100 GMT:
 Latin American market prices                              
 from Reuters                                        
                                                     
 Stock indexes                              daily %   YTD %
                                             change  change
                                Latest               
 MSCI Emerging Markets            1005.03      0.06   16.56
                                                     
 MSCI LatAm                       2558.31      0.84     9.3
 Brazil Bovespa                  63257.36      0.95    5.03
 Mexico IPC                      49494.40      0.92    8.44
 Chile IPSA                       4871.34      0.77   17.34
 Chile IGPA                      24440.82       0.7   17.88
 Argentina MerVal                21684.59      0.76   28.18
 Colombia IGBC                   10757.92      0.01    6.22
 Venezuela IBC                   72689.66      0.06  129.27
                                                           
 Currencies                                 daily %   YTD %
                                             change  change
                                   Latest            
 Brazil real                       3.2754      0.08   -0.80
                                                     
 Mexico peso                      18.4460      0.93   12.45
                                                     
 Chile peso                         670.9      0.60   -0.03
 Colombia peso                    2902.98      0.00    3.39
 Peru sol                           3.267      0.43    4.50
                                                     
 Argentina peso (interbank)       16.0800      0.12   -1.27
                                                     
 Argentina peso (parallel)          16.24      0.25    3.57
                                                     
 
    

 (Reporting by Bruno Federowski; Editing by James Dalgleish)
  

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