October 16, 2018 / 7:29 PM / a month ago

EMERGING MARKETS-LatAm assets mostly rise as Wall St rally boosts risk appetite

    By Susan Mathew
    Oct 16 (Reuters) - Latin American stocks were mostly higher
on Tuesday, lifted by an upbeat Wall Street, with Brazil stocks
gaining more than 2 percent while currencies firmed as the
dollar steadied.
    Strong earnings from blue-chips sent Wall Street higher,
bolstering investor sentiment toward developing market assets 
after a slew of geopolitical issues and a Wall Street sell-off
last week took a toll on emerging markets stocks.
   
    "The adjustment in equity markets in recent sessions has
been swift and painful. Looking ahead, however, there may be
little to offer a firm catalyst for reversal until the U.S.
mid-terms (elections)," analysts at TD Securities said in a
note.
    "With polls suggesting a divided Congress, the 'Make America
Great Again' theme that has come to dominate U.S. equity markets
and dollar price action for much of this year could be
challenged further as fiscal measures could be hard to come by,"
they added. 
    Brazil's Bovespa stock index rose, with airliner Gol
Linhas Aéreas Inteligentes SA and its loyalty program
Smiles Fidelidade SA leading gains.
    Shares of Smiles rose nearly 8 percent, after a 40 percent
plunge on Monday when Gol announced a plan to buy out minority
shareholders in Smiles.
    Mexico's IPC index climbed up to 1.2 percent, while
Buenos Aires' MerVal index pared gains and fell nearly 1
percent following strong gains on Friday. Argentine markets were
closed on Monday for a local holiday.
    Argentina's currency, however, rose more than 2
percent on continued sales of short-term notes by the central
bank at rates higher than 70 percent, and as a steady dollar
lent support to emerging market high yielders.
    Dollar traders await minutes from the Federal Reserve's
September meeting, scheduled for release on Wednesday.

    A Bank of America Merrill Lynch survey showed that emerging
market currencies are undervalued - the cheapest valuation since
the survey began. 
    Deutsche Bank warned that emerging markets are more
vulnerable than at any time in the last three years due to
global and domestic worries.
    Brazil's real firmed 0.3 percent in its ninth day of
gains out of eleven this month, while the Mexican peso
gained against the dollar for a fourth straight day.         
    
    Key Latin American stock indexes and currencies at 1851 GMT:
 Stock indexes                 Latest       Daily   YTD pct
                                              pct    change
                                           change  
 Brazil Bovespa                84,985.08     1.95     11.23
 Mexico IPC                    48,125.80     0.81     -2.49
 Chile IPSA                     5,138.36    -0.13     -0.13
                                                   
 Argentina MerVal              29,410.40    -0.63     -2.18
                                                   
 Colombia IGBC                 12,447.18     0.82      9.47
                                                   
                                                           
 Currencies                       Latest    Daily   YTD pct
                                              pct    change
                                           change  
 Brazil real                      3.7260     0.20    -11.08
                                                   
 Mexico peso                     18.7694     0.34      4.95
                                                   
 Chile peso                        669.2     1.54     -8.15
                                                   
 Colombia peso                   3,052.2     1.28     -2.30
 Peru sol                          3.333     0.06     -2.88
                                                   
 Argentina peso (interbank)      35.8000     2.77    -48.04
                                                   
 Argentina peso (parallel)         36.75     2.72    -47.67
                                                   
 

 (Reporting by Susan Mathew in Bengaluru; ; Editing by Dan
Grebler)
  
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