EMERGING MARKETS-Brazil's real ends six-day slump; Petrobras sinks Bovespa

viernes 7 de agosto de 2015 14:26 GYT
 

By Asher Levine
    SAO PAULO, Aug 7 (Reuters) - Brazilian financial markets
swung widely on Friday as investors digested disappointing
corporate results, central bank currency intervention, U.S.
labor data and political turbulence.
    The Brazilian real  rose for the first time
after a six-session slump that saw the currency weaken 6 percent
against the dollar. Brazil's Bovespa stock index dropped
its most in over two weeks, led by sharp decline in shares of
state-run oil producer Petroleo Brasileiro SA, known
as Petrobras.
    The real fluctuated in early trading before settling into
positive territory in the afternoon. Late on Thursday the
central bank stepped up its currency intervention program by
nearly doubling the number of currency swap contracts it offers
on a daily basis. 
    The real has weakened nearly 25 percent against the dollar
this year due to lower global commodities prices, the outlook
for higher interest rates in the United States, economic decline
and higher political risk.
    The swaps are derivatives that support the real by providing
investors with protection against currency losses.
    Meanwhile, yields on Brazilian interest rate futures
<0#DIJ:> shot higher across the curve after data on Friday
showed 12-month trailing inflation rose more than expected in
July, to the highest level in nearly 12 years. 
    Traders said the recent string of disappointing economic
data is throwing cold water on hopes for an economic recovery in
2016.
    The Bovespa fell to its lowest level in two weeks, mostly on
a 5 percent fall in Petrobras preferred shares. Late on Thursday
the company reported an 89 percent plunge in second-quarter net
income and an unexpected 1.6 billion real ($454.55 million)
charge to resolve a federal tax issue. 
    Investors also kept their eye on the outlook for higher
interest rates in the U.S. after encouraging payrolls data kept
the door open for a potential interest rate hike in September. 
    Higher interest rates in the U.S. are expected to drag on
the most widely-traded Brazilian stocks, which tend to attract a
large share of foreign investors.
    Also underlying moves across Brazilian asset classes was a
media report that Vice President Michel Temer would no longer
handle President Dilma Rousseff's relations with her allies in
Congress. While Temer later denied the report, investors remain
wary of the possibility that political infighting will knock
Brazil's fiscal adjustment off course and lead to a sovereign
credit downgrade. 
    
    Key Latin American stock indexes and currencies at 1815 GMT:
 Stock indexes                        daily %    YTD %
                             Latest    change   change
 MSCI Emerging Markets        885.62     0.08    -7.46
                                               
 MSCI LatAm                  2212.56     -0.3   -18.64
                                               
 Brazil Bovespa           48945.4968    -2.13    -2.12
                                   5           
 Mexico IPC                 44851.67    -0.15     3.95
                                               
 Chile IPSA                  3855.53    -0.29     0.12
                                               
 Chile IGPA                 18725.53    -0.36    -0.77
                                               
 Argentina MerVal          11233.869    -0.22    30.95
                                               
 Colombia IGBC               9875.83     0.43   -15.12
                                               
 Venezuela IBC              15252.71    -1.45   295.28
                                               
                                                      
 Currencies                           daily %    YTD %
                                       change   change
                              Latest           
 Brazil real                  3.5166     0.53   -24.43
                                               
 Mexico peso                 16.1561     1.03    -8.74
                                               
 Chile peso                   677.25     0.26   -10.46
                                               
 Colombia peso               2934.71     0.10   -18.63
 Peru sol                     3.2011     0.06    -6.94
                                               
 Argentina peso               9.2125    -0.03    -7.19
 (interbank)                                   
                                               
 Argentina peso                14.87     0.74    -5.85
 (parallel)                                    
                                               
 

 (Reporting by Asher Levine)