EMERGING MARKETS-Brazil's real extends gains as investors digest election

miércoles 29 de octubre de 2014 10:33 GYT

SAO PAULO, Oct 29 (Reuters) - Brazil's currency strengthened
for a second straight session on Wednesday as investors
reconsidered the market impact of President Dilma Rousseff's
    Other Latin American currencies also traded stronger against
the dollar on expectations the U.S. Federal Reserve would signal
 at the end of its policy-setting meeting on Wednesday that any
interest rate hikes are still a long way off.
    Regional stock markets were mixed, with Brazil's Bovespa
 down nearly 1 percent and Mexico's IPC index up
0.5 percent.
    Rousseff's victory over market-friendly challenger Aecio
Neves over the weekend drove the real to its weakest level since
2005 on Monday, though the move was less than many investors had
forecast and the currency has since erased those losses.
    "Everyone expected the dollar to explode (against the real)
this week, but it didn't happen," said Jankiel Santos, chief
economist with Espirito Santo Investment Bank in Sao Paulo. "As
a result a lot of those positions are being unwound."
    Investors also took a less negative view on the real after
names of potential finance minister nominees, some of them
market-friendly, began circulating in the media.
    Nomura analyst Tony Volpon also attributes the current
"honeymoon period" to investors recognizing that Brazil's high
level of foreign reserves is buffering the country from an
imminent crisis while attractive local yields continue to
support the carry trade.
    The MSCI Latin American stock index rose for
the third session in four.
    Brazil's Bovespa stock index retreated, however, after a
sharp rise on Tuesday.
     Losses were concentrated in widelytraded shares such as
those from mining firm Vale SA and from state-run oil
producer Petroleo Brasileiro SA, known as Petrobras.
Both companies tend to attract a high proportion of foreign
investors looking for exposure to Brazilian equities.
    Shares of steelmaker Usinas Siderurgicas de Minas Gerais SA,
known as Usiminas, fell 4.2 percent after the company
posted a third-quarter loss before market open. 
    Key Latin American stock indexes and currencies at 1430 GMT:
 Stock indexes                  daily %    YTD %
                                 change   change
 MSCI Emerging         1006.35     1.39    -1.01
 MSCI LatAm            3070.29     0.75    -4.79
 Brazil Bovespa       51892.95    -0.84     0.75
 Mexico IPC           44170.82      0.3     3.38
 Chile IPSA            3800.86     0.23     2.75
 Chile IGPA           18672.14     0.16     2.44
 Argentina MerVal     10449.72     0.02    93.84
 Colombia IGBC        13193.18     0.35     0.93
 Peru IGRA               16005     0.01     1.60
 Venezuela IBC         2842.34        0     3.86
 Currencies                     daily %    YTD %
                                 change   change
 Brazil real            2.4340     1.54    -3.17
 Mexico peso            13.417     0.22    -2.88
 Chile peso              576.5     0.43    -8.74
 Colombia peso         2043.74     0.57    -5.47
 Peru sol                2.912    -0.14    -4.09
 Argentina peso         8.5025     0.00   -23.64
 Argentina peso          14.57     0.75   -31.37

 (Reporting by Bruno Federowski and Asher Levine Editing by W