EMERGING MARKETS-Latam markets rise on China data, Brazil eyes electoral poll
SAO PAULO, July 1 (Reuters) - Latin American currencies and shares mostly gained on Tuesday following encouraging economic data from China, though Brazil's stock index was unable to hold onto early gains as investors speculated on the results of an upcoming electoral opinion poll. The MSCI Latin American stock index edged higher, snapping a four-day losing streak after data on Tuesday showed China's factory activity hit multi-month highs in June. China is a key purchaser of Latin American commodities exports such as copper, soybeans, petroleum and iron ore. The data initially boosted shares of Brazilian mining firm Vale SA, which counts China as its biggest customers, and the Bovespa stock index as a whole. Later in the session, however, shares of state-run oil producer Petroleo Brasileiro SA accelerated losses, pulling the index back into negative territory. Traders pointed to chatter over the outcome of a presidential electoral poll scheduled to be released by polling firm Datafolha as soon as Wednesday. In the past, polls showing greater voter support for President Dilma Rousseff ahead of her bid for re-election in October have weighed on shares of state-run companies. Many minority shareholders have accused the administration of enacting policies that are harmful to their interests. Mexican and Chilean shares were little changed. The region's currencies mostly strengthened, with Brazil's real continuing to hover at the 2.20 per dollar level. Most traders see Brazil's central bank defending the exchange rate at a level between 2.20 and 2.25 reais per dollar through the use of currency swap contracts. "What we're looking at now is how the central bank will act from here on out," said Marcos Trabbold, a currency trader with B&T in Sao Paulo. He expects the bank to monitor the market for a few sessions before deciding when, and at what pace, to begin rolling over currency swap contracts expiring in August. Colombia's peso posted its biggest one-day gain since April, strengthening 0.8 percent to 1,864 per dollar. "Unlike the other currencies, the (Colombian) peso, when it broke through 1880, had more momentum given that it was a really important technical level," said Siobhan Morden, head of Latin America strategy at Jefferies in New York. "The question is whether it keeps going or whether (the government) fights back." Key Latin American stock indexes and currencies at 1548 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1051.45 0.06 4.8 MSCI LatAm 3372.87 0.09 5.28 Brazil Bovespa 53055.41 -0.21 3.01 Mexico IPC 42778.19 0.1 0.12 Chile IPSA 3876.26 0.01 4.79 Chile IGPA 18902.26 0.01 3.70 Argentina MerVal 8111.5 2.84 50.46 Colombia IGBC 14061.27 -0.1 7.57 Peru IGRA 16714.11 0.31 6.10 Venezuela IBC 2106.03 -0.32 -23.04 Currencies daily % YTD % change change Latest Brazil real 2.2013 0.35 7.06 Mexico peso 12.944 0.18 0.66 Chile peso 551.9 0.16 -4.67 Colombia peso 1862.15 0.89 3.75 Peru sol 2.796 0.07 -0.11 Argentina peso (interbank) 8.1325 0.03 -20.17 Argentina peso (parallel) 12.03 1.00 -16.87 (Reporting by Priscila Jordao and Bruno Federowski; Writing by Asher Levine Editing by W Simon)
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