EMERGING MARKETS-Brazil stocks, currency extend rally on former president charges

jueves 10 de marzo de 2016 12:36 GYT

By Bruno Federowski
    SAO PAULO, March 10 (Reuters) - Brazil's stocks and currency
rose on Thursday, extending a recent rally fueled by hopes of
political change after prosecutors charged former President Luiz
Inacio Lula da Silva in a money laundering investigation.
    State investigators suspect the family of the former
president, who was detained for questioning by federal police on
Friday, owned an undeclared beachfront apartment in the city of
    Lula's support for current President Dilma Rousseff was
widely seen as a key factor behind her re-election. 
    Rousseff is facing impeachment proceedings in Congress and
many traders believe the corruption probe could strengthen the
odds of her ouster and thus help the crisis-ridden country
recoup its credibility.
    "Political issues are the main market driver and will remain
so for a while," said Carlos Vieira, an economist with Lerosa
brokerage in São Paulo.
    Shares of state-controlled oil company Petrobras,
the center of a wide-reaching graft scandal, rose as much as 3
percent, but later turned negative on the back of lower crude
    Nevertheless, the benchmark Bovespa stock index 
remained in the black, supported by leading banks ItauUnibanco
 and Bradesco, up 3.3 percent and 2.1
percent, respectively. 
    Investors said the banks, as well as state lender Banco do
Brasil SA, were being lifted by optimism about the
political scenario. 
    Traders saw little immediate market impact from Brazil's
plan to tap global markets for the first time since it lost its
investment grade rating with a dollar-denominated bond.
    The Brazilian real revisited its six-month highs and
strengthened for the seventh session in the last eight. Trading
was volatile, however, as some investors bet the central bank
could see the recent rally as a cue to reduce its support for
the currency.
    Brazil's central bank has about 110 billion reais ($29.92
billion) in outstanding currency swaps on its books, contracts
which offer protection from sharp currency devaluations. The
strategy has drawn criticism from some analysts due to its high
fiscal costs.
    The bank has been fully rolling over the stock of currency
swaps for several months. Some traders saw a decision to only
sell some of the contracts offered in a daily auction on Friday
as a signal it could allow some to mature in April.
    Key Latin American stock indexes and currencies at 1550 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets                791.04     0.43    -0.81
 MSCI LatAm                          2041.61     0.44    11.08
 Brazil Bovespa                     49114.93     0.92    13.30
 Mexico IPC                         44293.23    -0.45     3.06
 Chile IPSA                          3832.02     0.51     4.13
 Chile IGPA                         18754.70     0.46     3.32
 Argentina MerVal                       0.00        0  -100.00
 Colombia IGBC                       9573.20    -0.26    12.00
 Venezuela IBC                      16124.89    -1.07    10.53
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.6678     0.77     7.61
 Mexico peso                         17.8095    -0.28    -3.25
 Chile peso                              679    -0.56     4.52
 Colombia peso                        3222.7    -1.16    -1.66
 Peru sol                             3.4341     0.06    -0.59
 Argentina peso (interbank)          15.3300     0.31   -15.31
 Argentina peso (parallel)             15.66     0.38    -8.88

($1 = 3.6767 Brazilian reais)

 (Reporting by Bruno Federowski; Additional reporting by Paula
Arend Laier; Editing by Alistair Bell)