December 18, 2017 / 10:47 PM / 6 months ago

EMERGING MARKETS-Chilean markets rally as Pinera wins presidency

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, Dec 18 (Reuters) - Chilean stocks and currency
soared on Monday after conservative Sebastian Pinera won the
country's presidential election by a wider-than-forecast margin,
fueling expectations of further business-friendly policies.
    An investor favorite in the $250 billion economy, Pinera's
proposals are seen as pro-mining in the world's top copper
producer. He has pledged support and stable funding for
state-run miner Codelco, and has promised to slash red tape that
had bogged down projects under outgoing President Michelle
Bachelet.
    Chile's benchmark IPSA stock index jumped 6.9
percent in Monday trading.
    "Pinera's campaign agenda focused on investment and growth,
and we believe the administration will articulate policies with
that aim, which should help to consolidate the upbeat business
and consumer expectations," JPMorgan economists wrote in a
report.
    "That said, Pinera's administration will need ... political
savvy to negotiate laws in a fragmented Congress."
    The Chilean peso strengthened 2.38 percent against
the dollar, its biggest one-day advance in a year and a half,
leading gains in the region.
    Other currencies were range-bound amid doubts whether a
proposed U.S. tax cut would have a major impact on economic
growth, after the bill moved closer to passing.
    Uncertainty over whether the tax bill would indeed be pushed
through, as well as questions over its pro-growth effects, have
cast doubt on the outlook for inflationary pressures in the
United States, which has boosted expectations of higher interest
rates.
    Higher U.S. rates could dampen demand for high-yielding
assets, such as currencies from emerging markets.   
    Amid global weakness in the dollar, Mexico's IPC stock index
rose 1.25 percent, although analysts noted that investors were
cautious given uncertainty about how a U.S. tax overhaul  could
affect Mexico.
    
    Key Latin American stock indexes and currencies at 2108 GMT:
 Stock indexes                             daily %      YTD %
                                            change     change
                               Latest               
 MSCI Emerging Markets          1129.53       0.99      29.72
                                                    
 MSCI LatAm                     2777.86       2.31         16
                                                    
 Brazil Bovespa                73115.45        0.7      21.40
 Mexico IPC                    48681.64       1.25       6.66
 Chile IPSA                     5595.65        6.9      34.79
                                                    
 Chile IGPA                    28060.93       6.96      35.34
 Argentina MerVal              27137.32       0.43      60.41
                                                    
 Colombia IGBC                 11099.57        0.8       9.59
                                                    
 Venezuela IBC                  1291.05      -1.47     -95.93
                                                             
 Currencies                                daily %      YTD %
                                            change     change
                                                    
                                 Latest             
 Brazil real                     3.2912       0.33      -1.43
                                                    
 Mexico peso                    19.0830       0.12       8.71
                                                    
 Chile peso                       621.2       2.38       7.97
                                                    
 Colombia peso                   2977.2       0.56       0.82
 Peru sol                          3.28       0.27       4.09
                                                    
 Argentina peso (interbank)     17.5650      -0.28      -9.62
                                                    
 Argentina peso (parallel)         18.2      -0.60      -7.58
                                                    
 
 (Reporting by Bruno Federowski; Editing by Frances Kerry and
Peter Cooney)
  
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