May 30, 2018 / 3:40 PM / 23 days ago

EMERGING MARKETS-Brazil equities steady amid Petrobras, political worries

    SAO PAULO, May 30 (Reuters) - Brazil's Bovespa equities
index was little changed on Wednesday as a decline in
state-run oil company Petroleo Brasileiro SA was
offset by gains in some transport and consumer stocks that have
plunged in recent weeks.
    The index's performance on Wednesday reflects traders'
wariness about the resolve and ability of the government to
maintain market-friendly policies in the midst of large-scale
trucker and oil worker strikes.
    Still, deal seeking managed to bring the index into positive
territory, after a morning in the red.
    The center of attention was Petrobras. Preferred and common
shares in the company fell some 3 percent and 1.5 percent,
respectively, in morning trade, as workers at the company walked
off the job and various media outlets, including Reuters,
reported that President Michel Temer may force Petrobras to
ditch its market-based fuel pricing
system.
    They later trimmed those losses - with the common shares
turning positive - after Temer's office said he was committed to
Petrobras' financial health and would preserve its pricing
policies.
    Traders in general said they were worried about the waning
strength of the already fragile Temer government. On Tuesday,
Temer was forced to swat away questions from journalists about
the possibility of a military coup.
    Market participants are also trying the measure the costs of
a 10-day truckers' strike that is now winding down.
    "The market remains very fragile," said one Rio de
Janeiro-based trader. "Despite improvements, the situation is
not resolved, and losses still need to be figured out."
    The Bovespa, which has fallen some 16 percent since May 16,
was up 0.3 percent by early afternoon after falling almost 0.5
percent earlier, amid a generally positive day for equities in
Latin America. The country's real currency had fallen
0.29 percent, to 3.75 reais to the dollar.
    Losses would have been greater had traders not scooped up
stocks that may have been oversold over the last two weeks amid
the truckers' protest.
    The biggest percentage gainer on the Bovespa was electronics
and appliance retailer Magazine Luiza SA, up 4.2
percent, after fears of major supply disruptions subsided. Also
gaining was highway operator Ecorodovias, which
climbed 3.4 percent, recouping dramatic losses over the last two
weeks as politicians lowered toll revenue targets to assuage the
protesting truckers. 
    
Key Latin American stock indexes and currencies at 1452 GMT:
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1111.83     -1.28     -2.78
                                                  
 MSCI LatAm                    2545.41     -0.54     -9.51
                                                  
 Brazil Bovespa               75971.14     -0.13     -0.56
                                                  
 Mexico IPC                   44564.76     -0.19     -9.70
                                                  
 Chile IPSA                    5511.43      0.31     -0.96
                                                  
 Chile IGPA                   27888.31      0.21     -0.33
                                                  
 Argentina MerVal             28559.25      0.82     -5.01
                                                  
 Colombia IGBC                12248.37      0.35      7.72
                                                  
 Venezuela IBC                35039.65      0.99   2674.01
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.7487     -0.29    -11.61
                                                  
 Mexico peso                   19.7350      0.47     -0.18
                                                  
 Chile peso                     628.45      0.06     -2.20
                                                  
 Colombia peso                 2878.29      0.93      3.60
 Peru sol                        3.269      0.21     -0.98
                                                  
 Argentina peso                24.9250     -0.18    -25.38
 (interbank)                                      
                                                  
 Argentina peso                  25.85      0.00    -25.61
 (parallel)                                       
                                                  
 

 (Reporting by Gram Slattery; additional reporting by Paula
Arend Laier
Editing by Susan Thomas)
  
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