EMERGING MARKETS-Latam stocks, FX rise after U.S., Colombia data
(Adds closing prices, Argentina data, economic analyst's quote) By Asher Levine SAO PAULO, March 20 (Reuters) - Latin American currencies closed higher on Thursday while stock markets advanced with encouraging economic data in the United States and Colombia offsetting concerns over a sooner-than-expected increase in U.S. interest rates. The region's currencies sank late on Wednesday after U.S. Federal Reserve chief Janet Yellen suggested the central bank could increase interest rates "around six months" after it finishes unwinding its monetary stimulus program, a shorter time frame than many market participants had anticipated. Nearly every currency across Latin America strengthened against the dollar on Thursday, however, after the Philadelphia Federal Reserve Bank said its business activity index rose far more than expected in March. Traders said the data helped feed risk appetite among global investors. Colombia's peso gained 0.87 percent after data showed the country's economy grew 4.3 percent in 2013, beating market expectations. "After a sustained depreciation for most of the year, the peso seems to be on the comeback trail, driven by sustained macroeconomic stability, reduced electoral worries and deepening rate hike expectations," Oxford Economics analyst Aryam Vasquez wrote on Thursday. Brazil's real advanced about 1 percent, while Mexico's peso bounced back after posting its biggest one-day loss in six weeks in the previous session. Mexican Finance Minister Luis Videgaray said on Thursday Mexico is well positioned to face market volatility and is working to maintain its flexible credit line with the International Monetary Fund. Argentina's official peso rate was unchanged, while the black market rate weakened 0.2 percent against the dollar. Government data on Thursday showed the country's trade surplus totaled $44 million in February, far short of the $363 million surplus forecast in a Reuters poll. STOCKS RALLY Local stocks mostly gained, with the MSCI Latin American stock index rallying for the fourth straight session and closing at a nearly two-week high. Brazil's Bovespa also advanced for a fourth day, closing 1.53 percent higher and putting it back into slightly positive territory for the month. The index has not seen a monthly gain since October as jitters over a weakening economy and an upcoming presidential election led investors to look for opportunities elsewhere. State-controlled companies such as oil producer Petroleo Brasileiro SA, electric utility Eletrobras and lender Banco do Brasil continued to post strong gains, with traders expecting an upcoming poll to show opposition candidates gaining on President Dilma Rousseff. Many investors have been critical of the Rousseff administration for heavy-handed government intervention in the private sector and policies that run against the interests of minority shareholders in state-controlled firms. Private-sector banks such as Banco Bradesco SA and Itau Unibanco Holdings SA also advanced. Liquidity risks to Brazil's lenders should remain stable in the first half of 2014, central bank director Anthero Meirelles said on Thursday. Despite its mediocre performance over the past 12 months, the Bovespa is likely to move higher this year amid a global economic recovery, a Reuters poll showed, while Mexican shares will likely gain on the back of market reforms. Mexico's IPC index rose 2.07 percent to finish trading at 39,616 points, a level it has not closed above since late February. Gains were driven by a 4.6 percent jump in bottling firm Femsa and a 1.6 percent rise in telecommunications firm America Movil. Chile's IPSA index closed higher for the third session in four, led by a 1.9 percent rise in shares of lender Santander Chile. Latin American stock indexes and currencies at 2044 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging 940.7 -1.04 -6.18 Markets MSCI LatAm 2967.38 1.32 -7.29 Brazil Bovespa 47278.48 1.53 -8.21 Mexico IPC 39616.19 2.07 -7.28 Chile IPSA 3656.05 0.47 -1.17 Chile IGPA 18091.78 0.44 -0.74 Argentina MerVal 5965.11 1.67 10.65 Colombia IGBC 13119.78 0.7 0.37 Peru IGRA 14454.23 -0.01 -8.25 Venezuela IBC 2488.61 -3.85 -9.06 Currencies daily % YTD % Latest change change Brazil real 2.3249 0.96 1.22 Mexico peso 13.2505 0.26 -1.66 Chile peso 566 0.44 -7.05 Colombia peso 1992 0.87 -3.01 Peru sol 2.815 -0.07 -0.78 Argentina peso 7.9625 -0.13 -18.46 (interbank) Argentina peso 10.9 0.18 -8.26 (parallel) (Editing by Meredith Mazzilli and Grant McCool)
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