EMERGING MARKETS-Brazil currency, stocks rise on hopes of fiscal austerity
(Updates prices) By Bruno Federowski SAO PAULO, July 14 (Reuters) - Brazil's currency and stocks gained on Thursday on hopes interim President Michel Temer will manage to push through austerity measures following the election of a right-leaning ally as speaker of the lower house of Congress. Rodrigo Maia of the Democrats party, known as DEM, handily won a vote to replace speaker Eduardo Cunha who quit last week as he faced expulsion from the legislature over ethics violations. "Maia will likely fight by Temer's side in seeking to pass fiscal measures in Congress," analysts with H.Commcor brokerage wrote in a client note. Temer told reporters Maia's election on early Thursday showed growing political harmony. Analysts say that could grease the wheels for the approval of a bill that limits public expenditure growth, which can help curb inflation and reverse swelling budget deficits. Brazil's real currency rose 0.46 percent, while the country's Bovespa benchmark stock index advanced 1.62 percent in its seventh straight day of gains. Among strong equities gainers were financial shares. Credit Suisse analysts improved their recommendation for shares of banks Bradesco SA and Itaú Unibanco SA to "outperform" and "neutral", respectively. Shares of Usinas Siderúrgicas de Minas Gerais SA advanced 0.93 percent after sources told Reuters the steelmaker is asking banks to extend a 120-day standstill agreement covering 4 billion reais ($1.2 billion) in loans that expire next week. Other Latin American markets also rose after the Bank of England signaled it could present a stimulus package in August, though it surprised many investors by keeping interest rates on hold. Mexico's IPC stock index ended the session up 0.49 percent, having touched a record high earlier in the day, and the Mexican peso also appreciated. Argentina's Merval benchmark stock index also hit a fresh record high, while the Chilean peso strengthened nearly 1 percent. Key Latin American stock indexes and currencies at 2023 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 866.27 1.16 7.83 MSCI LatAm 2362.82 2.48 26.6 Brazil Bovespa 55480.87 1.62 28.12 Mexico IPC 46498.51 0.49 8.19 Chile IPSA 4074.97 0.67 10.60 Chile IGPA 20120.39 0.58 10.74 Argentina MerVal 15469.65 2.14 32.35 Colombia IGBC 9901.06 0.68 15.84 Venezuela IBC 11914.88 -1.45 -18.33 Currencies daily % YTD % change change Latest Brazil real 3.2595 0.46 21.56 Mexico peso 18.3020 0.40 -6.07 Chile peso 650.8 0.87 9.05 Colombia peso 2916 0.79 8.69 Peru sol 3.279 0.03 4.12 Argentina peso (interbank) 14.7100 -0.95 -11.74 (Reporting by Bruno Federowski; Additional reporting by Paula Arend Laier; Editing by W Simon and Jeffrey Hodgson)
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