February 11, 2020 / 8:39 PM / 9 days ago

EMERGING MARKETS-Bovespa surges on upbeat earnings outlook, fading coronavirus fears

    * Virus may peak this month in China -expert
    * Colombian peso climbs from two-month low 
    * Vale provides biggest boost to Bovespa 

 (Updates prices, adds comment)
    By Sruthi Shankar
    Feb 11 (Reuters) - Brazilian shares rallied on Tuesday on
upbeat results from miner Vale SA and lender Itaú
Unibanco Holding SA, and as global stock markets
surged after China's senior medical adviser suggested the
coronavirus outbreak may be over in April.
    The Bovespa gained 2.3%, on course for its best day
in over a month and leading gains among major Latin American
stock markets.
    Vale gained 3.5% after it left its 2020 iron ore production
guidance unchanged despite posting a sharp output decline in the
fourth quarter and as China iron ore futures registered their
biggest one-day gain in seven months.
    Itaú Unibanco rose 1.8% as Brazil's largest lender estimated
fee income growing above its 2020 national inflation forecast
and it aimed to trim costs by up to 2%.
    The global mood brightened after China's senior medical
adviser said on Tuesday the number of new cases was falling in
some provinces and forecast the epidemic would peak this month.

    Concerns about the impact of the outbreak on the world's
second largest economy has dented investor appetite for Latin
American assets, as China accounts for a major share of demand
for the region's goods.  
    Most Latin American currencies also firmed, but the
Brazilian real hit a fresh record low of 4.3403 per
dollar, extending losses for a fourth session amid capital
outflows from country's financial assets.
    A central bank survey of economists showed on Monday
inflation expectations for 2020 dropped to a new low of 3.25%.
Last week, the central bank cut its benchmark Selic rate to a
record low of 4.25%.
    "Declining 2020 inflation expectations could ultimately also
translate into lower 2021 inflation expectations, suggesting a
higher bar for markets to price out the degree of policy
accommodation currently embedded in the curve," Morgan Stanley
analysts wrote in a note.
    However, the Colombia's peso currency rebounded from
two-month lows as crude prices gained. 
    The Mexican peso and the Chilean peso also
strengthened against the dollar.
    Federal Reserve Chair Jerome Powell told Congress the U.S.
economy was in a good place, even as he cited the potential
threat from the coronavirus in China and concerns about the
economy's long-term health.
    
    Key Latin American stock indexes and currencies at 1959 GMT:
    
         Stock indexes                  Latest    Daily %
                                                   change
 MSCI Emerging Markets                   1098.93       1.1
 MSCI LatAm                              2784.22      1.82
 Brazil Bovespa                        115129.06      2.27
 Mexico IPC                             45143.69      1.93
 Chile IPSA                              4660.27      0.71
 Argentina MerVal                       39869.36    -2.883
 Colombia COLCAP                         1645.56      0.15
                                                          
             Currencies                 Latest    Daily %
                                                   change
 Brazil real                              4.3253     -0.11
 Mexico peso                             18.6540      0.23
 Chile peso                                791.5      0.24
 Colombia peso                           3418.35      1.06
 Peru sol                                  3.387      0.17
 Argentina peso (interbank)              61.1150     -0.22
                                                  
 
 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru;
Editing by Richard Chang)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below