EMERGING MARKETS-China data boosts Latam markets, Tombini comments sink real
SAO PAULO, May 22 (Reuters) - Latin American currencies and stocks gained on Thursday following better-than-expected manufacturing data from China, though Brazil's real weakened after the central bank hinted that a currency intervention program currently in place may change. Data on Thursday showed China's factory sector posted its best performance in five months in May, relieving investor concerns over an economic slowdown in a key purchaser of Latin American commodities such as soybeans, copper and iron-ore. Brazil's Bovespa stock index erased the previous session's losses, driven by preferred shares of iron-ore miner Vale SA, which counts China as its biggest customer. Bank shares posted a partial rebound a day after a second-tier court ruled against the industry in a decades-old case over disputed compensation for savings accounts. "No one knows what the impact will be yet, as there are many variables," said Hersz Ferman, an economist with brokerage Elite Corretora in Rio de Janeiro. "That's why the stocks are volatile, though with a negative bias." Mexico's IPC stock index rose for a second day, driven by shares of broadcaster Grupo Televisa. Mexican annual inflation eased to a seven month low in early May, boosting expectations that policymakers will leave interest rates on hold this year at a record low to support weak growth. Most Latin American currencies strengthened against the dollar, tracking a rise in global risk appetite. Brazil's real reversed early gains, however, after central bank chief Alexandre Tombini said on Thursday that demand for currency swaps being offered under the bank's currency intervention program has decreased. "The market interpreted that the central bank could reduce the supply of swaps or interrupt the daily intervention program," said Flavio Serrano, senior economist with Espirito Santo Investment Bank in Sao Paulo. The currency swaps provide hedges against currency losses. The central bank started its daily intervention program in the foreign exchange market in August to stem a sharp drop in the real, but slowed its pace this year. Key Latin American stock indexes and currencies at 1511 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1039.94 0.8 2.89 MSCI LatAm 3325.2 0.32 3.56 Brazil Bovespa 52420.06 0.42 1.77 Mexico IPC 41955.1 0.3 -1.81 Chile IPSA 3911.83 0.79 5.75 Chile IGPA 19149.95 0.63 5.06 Argentina MerVal 7349.9 1.22 36.34 Colombia IGBC 13630.22 -0.14 4.28 Peru IGRA 15671.12 0.19 -0.52 Venezuela IBC 2188.4 0 -20.03 Currencies daily % YTD % change change Latest Brazil real 2.2153 -0.31 6.39 Mexico peso 12.8872 0.32 1.11 Chile peso 550.1 0.49 -4.36 Colombia peso 1900.95 0.50 1.63 Peru sol 2.787 0.07 0.22 Argentina peso (interbank) 8.0600 0.03 -19.45 Argentina peso (parallel) 11.95 1.26 -16.32 (Reporting by Priscila Jordao and Bruno Federowski; Writing by Asher Levine; editing by Andrew Hay)
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