January 10, 2020 / 3:48 PM / a month ago

EMERGING MARKETS-Brazil stocks rise on strong inflation data; Latam equities firm

    * Brazil equities gain after five straight days of decline
    * Brazil 2019 inflation exceeds economists' forecast 
    * Investors turn optimistic as fears of Middle East war fade
    * Mexican peso firms; Argentinian and Chilean stocks gain

    By Sagarika Jaisinghani and Susan Mathew
    Jan 10 (Reuters) - Brazilian stocks rose for the first time
in six days on Friday on better-than-expected inflation figures,
while the easing of U.S.-Iran tensions lifted Latin American
equities.
    Brazil's stock index gained 0.4% and the real
firmed 0.3% as data showed consumer prices rose at a
faster-than-expected pace in 2019, mainly led by higher meat
prices.
    The figures were the latest indication of a slight pickup in
Latin America's largest economy and will potentially further
delay interest rate cuts by the central bank after four
consecutive reductions last year, analysts said.
    "In Brazil, the rate cut cycle had ended and inflation is
high enough that the central bank has to be cautious about
cutting rates (further)," said Win Thin, global head of emerging
market currency strategy at Brown Brothers Harriman. 
    "The takeaway is that the economy remains soft."
    Investor sentiment was dented earlier in the week on
concerns of a additional strife in the Middle East after the
United States killed a top Iranian general, prompting a
retaliation.
    But in the absence of further military action by both
countries, world stock markets notched record highs on Friday as
investors turned optimistic about faster global growth in 2020.
Wall Street also hit all-time opening highs, powered by tech
stocks.
    Argentinian equities added 1.2%, while Chilean
stocks rose 0.3%. A Reuters poll on Friday showed
Chile's economy is expected to start expanding again in 2020
after intense social unrest last year.
    The Mexican peso firmed about 0.4% and was on track
for its fifth weekly increase in six. Data on Friday showed
Mexican industrial output rose 0.8% in November from October,
the first monthly rise since August.
    The region's currencies will tread carefully this year amid
continuing political tensions and worries over more
protectionist talk in the U.S. presidential election campaign
later in 2020, a Reuters poll of analysts showed.
    
    Key Latin American stock indexes and currencies at 1459 GMT:
   
     Stock indexes              Latest    Daily % change
 MSCI Emerging Markets           1134.37            0.44
                                          
 MSCI LatAm                      2926.32            0.31
                                          
 Brazil Bovespa                116412.85             0.4
                                          
 Mexico IPC                     44594.21            0.05
                                          
 Chile SPIPSA                    4913.54            0.31
                                          
 Argentina MerVal               42548.43            1.22
                                          
 Colombia Colcap                 1651.98           -0.09
                                          
                                                        
        Currencies              Latest    Daily % change
 Brazil real                      4.0738            0.26
                                          
 Mexico peso                     18.7913            0.22
                                          
 Chile peso                        771.8           -0.56
                                          
 Colombia peso                   3274.23           -0.68
 Peru sol                         3.3198            0.01
                                          
 Argentina peso (interbank)      59.8150               -
                                          
 
 (Reporting by Sagarika Jaisinghani and Susan Mathew in
Bengaluru; Editing by Dan Grebler)
  
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