EMERGING MARKETS-Rising rouble calms Latam markets after recent rout
SAO PAULO, Dec 17 (Reuters) - Latin American stocks and currencies were mostly stronger on Wednesday after Russia's rouble rebounded against the dollar, easing investor jitters over global financial stability. Debt, equities and foreign exchange markets in Latin America have been hammered this month after a sharp drop in oil prices and a plummeting Russian rouble sapped demand for riskier investments from emerging markets. On Wednesday the rouble halted its decline and strengthened about 7 percent after the government sold dollars and because exporters also sold dollars in preparation for monthly tax payments due this week. "The rouble is rising and that is putting aside some of the concerns of an uncontrolled freefall," said Jaime Ferreira, head of currency trading at Sao Paulo brokerage Intercam. "But the market is still very sensitive and it could turn sour again with any new scare." The Brazilian real strengthened against the dollar after five straight days of declines that saw the currency reach its weakest point in 9 and 1/2 years. Investors also kept their eye on the outlook for the central bank's currency intervention program. Central bank head Alexandre Tombini said on Tuesday that the program, which offers hedging protection to local businesses and helps support the real, would continue next year, although the size of the program could be reduced. "Decreasing it is equivalent to buying dollars, and would likely feed into even greater real losses," Brown Brothers Harriman analysts wrote in a client note. A short-term decrease of the intervention was unlikely, they added. The Chilean and Mexican pesos also gained against the dollar. Latin American stock markets moved mostly higher, with Brazil's Bovespa stock index notching its biggest one-day gain in nearly a month. Gains were concentrated in the most widely traded banking shares on expectations for higher interest rates given the increasing inflation pressure from a weaker currency. As interest rates rise local banks gain more from holdings of interest-rate-linked government debt. Shares of state-run oil producer Petroleo Brasileiro SA rose slightly on bargain-hunting after the stock, which has been suffering due to ongoing corruption investigations, touched its lowest level in ten years on Tuesday. Key Latin American stock indexes and currencies at 1502 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 918.59 0.95 -9.25 MSCI LatAm 2584.38 3.49 -21.98 Brazil Bovespa 48184.52 2.5 -6.45 Mexico IPC 40869.1 1.6 -4.35 Chile IPSA 3768.58 0.45 1.88 Chile IGPA 18515.15 0.39 1.58 Argentina MerVal 7893.87 2.91 46.43 Colombia IGBC 10629.28 1.43 -18.68 Peru IGRA 14146.52 0.11 -10.20 Venezuela IBC 3819.31 -0.16 39.57 Currencies daily % YTD % change change Latest Brazil real 2.7011 1.23 -12.75 Mexico peso 14.636 0.76 -10.97 Chile peso 617.8 0.36 -14.84 Colombia peso 2417.4 0.31 -20.08 Peru sol 2.962 0.20 -5.71 Argentina peso 8.5500 0.03 -24.06 (interbank) Argentina peso 13.1 0.38 -23.66 (parallel) (Reporting by Bruno Federowski; Writing by Asher Levine Editing by W Simon)
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