EMERGING MARKETS-Latam stocks, currencies up after BoE rate cut
By Bruno Federowski SAO PAULO, Aug 4 (Reuters) - Latin American stocks and currencies advanced on Thursday after the Bank of England unleashed sweeping measures to cushion the impact of Britain's decision to leave the European Union. The BoE reduced interest rates 25 basis points to 0.25 percent and said it would buy 60 billion pounds ($78.8 billion) in government bonds in newly printed money over the coming six months. "The Bank of England also left the door open to doing more. Many expect another rate cut to bring rates closer to zero," Brown Brothers Harriman analysts wrote in a client note. Lower interest rates abroad spell good news for high-yielding emerging market assets, which are well-positioned to lure fresh capital injected by central banks in developed economies. Brazil's equities and currency outperformed their peers, with the benchmark Bovespa stock index jumping nearly 1.7 percent to its highest intraday peak since May 2015 supported by a rally in financial shares. Stocks in Braskem SA, Latin America's largest petrochemical company, jumped more than 10 percent after it posted a 15 percent rise in second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) despite a sharp drop in its net profit. Meanwhile, Brazil's real strengthened 1.2 percent to reach a five-week high, with traders citing strong dollar inflows to companies in the country. Major companies such as miners Vale SA and state-controlled oil company Petróleo Brasileiro SA have issued bonds in foreign debt markets recently as pledges of fiscal austerity from interim President Michel Temer rekindled demand for Brazilian assets. Key Latin American stock indexes and currencies at 1620 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 878.05 1.14 9.32 MSCI LatAm 2,418.29 2.43 29.03 Brazil Bovespa 57,975.98 1.58 33.74 Mexico IPC 46,784.15 -0.13 8.86 Chile IPSA 4,116.13 0.45 11.84 Chile IGPA 20,352.21 0.39 12.12 Argentina MerVal 15,569.69 0.9 33.36 Colombia IGBC 9,625.40 0.28 12.61 Venezuela IBC 12,481.28 0.87 -14.44 Currencies Latest Daily YTD pct pct change change Brazil real 3.2029 1.16 23.23 Mexico peso 18.8480 0.19 -8.58 Chile peso 656.2 0.06 8.15 Colombia peso 3,066.37 0.87 3.36 Peru sol 3.331 0.54 2.49 Argentina peso (interbank) 14.8600 0.13 -12.63 Argentina peso (parallel) 15.32 0.00 -6.85 (Reporting by Bruno Federowski; Additional reporting by Paula Arend Laier; Editing by W Simon)
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