EMERGING MARKETS-Brazilian markets gain on fiscal, ECB hopes
SAO PAULO, Jan 21 (Reuters) - Brazil's stocks and currency gained on Wednesday on optimism about recent government efforts to correct fiscal imbalanceswhile expectations of additional stimulus by the European Central Bank boosted Latin American markets in general. A more than 2 percent rise in oil prices also supported investor appetite for emerging market assets, driving the Colombian peso 0.9 percent higher. Oil is Colombia's main export. Latin American markets added to gains after the Wall Street Journal reported that the ECB's executive board proposed a quantitative easing program worth 50 billion euros in bond purchases per month for at least one year. The additional liquidity may increase investors' appetite for higher-yielding assets in emerging markets. The Brazilian real strengthened 1 percent, piercing the 2.6 reais per dollar mark, with investor sentiment also supported by measures announced by the government early in the week to shore up Brazil's fiscal accounts. "The market is having a good week, but I'm not sure the real will be able to hold below 2.6," said Jaime Ferreira, head of currency trading at Sao Paulo brokerage Intercam. Brazil's benchmark Bovespa index rose 2.3 percent, boosted by shares of financial institutions such as Itau Unibanco Holding SA and Banco Bradesco SA, which benefited from an expected rise in the country's base interest rate later on Wednesday. Shares of state-owned oil company Petroleo Brasileiro SA, or Petrobras, climbed 3.9 percent along with oil prices. Key Latin American stock indexes and currencies at 1515 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging 974.73 1.82 0.1 Markets MSCI LatAm 2695.57 2.15 -3.26 Brazil Bovespa 48957.81 2.26 -2.10 Mexico IPC 41905.76 0.37 -2.87 Chile IPSA 3770.48 0.58 -2.09 Chile IGPA 18537.94 0.47 -1.76 Argentina MerVal 8670.34 1.01 1.06 Colombia IGBC 10516.21 0.53 -9.61 Peru IGRA 13582.89 0.01 -8.19 Venezuela IBC 3948.56 -0.33 2.33 Currencies daily % YTD % change change Latest Brazil real 2.5894 0.91 2.63 Mexico peso 14.612 0.33 0.90 Chile peso 627.5 0.20 -3.36 Colombia peso 2354.99 0.88 1.40 Peru sol 3.012 -0.07 -1.10 Argentina peso 8.6075 0.06 -0.67 (interbank) Argentina peso 13.6 0.37 2.94 (parallel) (Reporting by Bruno Federoski and Walter Brandimarte; Editing by James Dalgleish)
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