EMERGING MARKETS-Latam markets drop on profit-taking ahead of U.S. data
By Asher Levine SAO PAULO, April 3 (Reuters) - Latin American stocks and currencies fell on Thursday as investors took profits in both after recent rallies, with markets positioning for U.S. employment data due Friday. The MSCI Latin American stock index retreated about 1.2 percent after touching its highest level of the year in the previous session. Chilean, Brazilian and Mexican stocks were all trading lower. Data on Thursday showed a larger-than-expected rise in U.S. jobless claims in the week ended March 29, though the underlying trend continued to point to some strength in the labor market. Investors remained focused on Friday's U.S. nonfarm payroll report, however, taking the opportunity to pocket recent gains in expectation of a stronger number. An encouraging print would help support the case for further tapering of the U.S. Federal Reserve's monetary stimulus program, which has helped support local currencies and stocks. "If that data comes out strong it's going to be risk-off in the context of a slightly more hawkish interpretation of tapering," said Siobhan Morden, head of Latin America strategy at Jefferies in New York. "So I assume it's probably just profit-taking after what had been some notable gains on foreign exchange over this past week and a half, ahead of nonfarm payrolls tomorrow." Brazil's real slipped 0.4 percent on Thursday, though it remains 3.4 percent stronger against the dollar this year. The Mexican and Chilean pesos weakened 0.3 percent and 0.6 percent, respectively. Brazil's benchmark Bovespa stock market index fell slightly the day after it moved back into positive territory for the year. Brazil's market has rallied in recent sessions, driven by an increase in global risk appetite and a recent poll showing a decline in the approval rating of President Dilma Rousseff's government. Many investors have been critical of the current government for what they say has been its heavy-handed meddling in the private sector and for policies that run against the interests of minority shareholders in state-controlled companies, shares of which soared after the poll. Investors took profits on those gains on Thursday, with shares of state-run Petroleo Brasileiro SA, known as Petrobras, down 0.5 percent, and lender Banco do Brasil SA falling 1.6 percent. Elsewhere in Latin America, Mexico's IPC stock index and Chile's IPSA index both capped a five-session rally. Key Latin American stock indexes and currencies at 1611 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1000.09 -0.49 0.23 MSCI LatAm 3203.98 -1.17 1.28 Brazil Bovespa 51455.44 -0.48 -0.10 Mexico IPC 40750.6 -0.37 -4.63 Chile IPSA 3782.85 -0.71 2.26 Chile IGPA 18588.63 -0.63 1.98 Argentina MerVal 6558.11 1.82 21.65 Colombia IGBC 14090.79 0.32 7.80 Peru IGRA 14316.14 0.12 -9.12 Venezuela IBC 2524.28 0.04 -7.76 Currencies daily % YTD % change change Latest Brazil real 2.2785 -0.40 3.44 Mexico peso 13.127 -0.29 -0.74 Chile peso 556.4 -0.56 -5.45 Colombia peso 1961.7 0.12 -1.51 Peru sol 2.808 0.00 -0.53 Argentina peso (interbank) 8.0025 0.00 -18.87 Argentina peso (parallel) 10.74 0.56 -6.89 (Editing by Peter Galloway)
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