EMERGING MARKETS-Mexico shares hit new high but peso hurt by U.S. rates concerns
By Bruno Federowski SAO PAULO, July 20 (Reuters) - Mexico's stock market rallied for a fifth straight day to a fresh record intraday high on Wednesday, but its peso currency weakened on concerns over higher U.S. interest rates. Worries that the U.S. Federal Reserve could increase rates as soon as September after a muted market reaction to Britain's decision to leave the European Union weighed on the high-yielding currency. But many traders would see higher Fed rates as an evidence of strength in the world's biggest economy, spelling good news for Mexican companies since the country mainly exports to the United States. "Stock markets are brushing over the (Mexican) peso's underperformance this year as signs that the U.S. economy is on track to gain momentum," a trader focused on Latin America said in New York. Also supporting demand for riskier assets were advances in U.S. and European stock markets following upbeat corporate results as well as a jump in crude prices . The Mexican peso fell 0.5 percent to 18.59 pesos to the dollar, taking its year-to-date losses to 7.3 percent. However, the Mexican benchmark stock index rose 0.4 percent to 47,268,86 points, trimming gains from its high of 47,290.25 points. Brazil's benchmark Bovespa fell as much 0.8 percent on profit-taking following 10 straight daily gains, but later pared losses to about 0.3 percent to 56517.71, cushioned by rising financial shares. Goldman Sachs updated its assessment on Brazilian banks to "neutral" from "cautious" and increased their price targets for lenders Itaú Unibanco Holding SA, Santander Brasil SA and BTG Pactual SA. Shares in Brazil's phone carrier Oi SA, which are not part of the index, jumped as much as 22 percent after Reuters reported a group of investors are working with an investment bank in a takeover bid. Key Latin American stock indexes and currencies at 1640 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 869.11 0.11 9.32 MSCI LatAm 2391.59 0.43 30.15 Brazil Bovespa 56517.71 -0.32 30.38 Mexico IPC 47268.86 0.44 9.99 Chile IPSA 4140.56 0.02 12.51 Chile IGPA 20411.39 0.05 12.45 Argentina MerVal 15798.66 -0.21 35.32 Venezuela IBC 12244.16 -0.16 -16.07 Currencies daily % YTD % change change Latest Brazil real 3.2483 0.31 21.51 Mexico peso 18.5900 -0.49 -7.32 Chile peso 649.9 0.17 9.20 Peru sol 3.309 -0.24 3.17 Argentina peso (interbank) 15.0050 0.03 -13.48 Argentina peso (parallel) 15.21 0.13 -6.18 (Por Bruno Federowski; Editing by W Simon)
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