EMERGING MARKETS-Brazil stocks fall despite fiscal pledge, oil prices weigh on Latam
By Walter Brandimarte and Asher Levine RIO DE JANEIRO/SAO PAULO, Nov 27 (Reuters) - Brazilian stocks ended lower on Thursday as investors mulled whether a fiscal hawk picked by President Dilma Rousseff as the country's new finance minister will have autonomy to significantly change the country's economic policies. The choice of Joaquim Levy to succeed Finance Minister Guido Mantega drew praise from economists and bankers in Brazil and initially bolstered stocks as he pledged strict fiscal targets for the next couple of years. Local markets had already rallied recently as Levy's name was leaked to the press last week. But further market gains will depend on whether Levy provides concrete signs that he will be able to change course on Rousseff's past economic policies, which are widely criticized by investors and economists for fueling inflation and failing to boost economic growth. "While Mr. Levy has talked tough on the need to restore fiscal discipline, there is a substantial gap between the policies he has advocated and the ones that were followed during Ms. Rousseff's first term in office," said Neal Shearing, chief emerging markets economist with London-based Capital Markets. "It remains to be seen whether this divide can be bridged." The Brazilian real added to losses after Alexandre Tombini, chosen by Rousseff to remain at the helm of the central bank, signaled that policymakers are unlikely to further expand their currency-intervention program. Tombini said the more than $100 billion worth of currency swaps offered by the central bank since the beginning of its intervention program more than a year ago are already enough to "significantly meet" investors' demand for currency hedge. Brazil's benchmark Bovespa index lost 0.9 percent after gaining as much as 1.7 percent earlier. The real shed 0.8 percent. Trading volumes were below average in Brazil as well as in the rest of Latin America as many investors were away for the U.S. Thanksgiving holiday. Weighing on Latin American markets was also a steep fall in oil prices following an a meeting of the OPEC oil-exporter group that decided to keep output unchanged despite the recent price slide. Lower oil prices are detrimental to Latin American countries that export the commodity such as Colombia, Venezuela, and Mexico. They could also raise questions about the viability of giant deep-sea oil development projects by Brazil's state-run Petroleo Brasileiro SA. But preferred shares of Petrobras, as the Brazilian oil company is known, were mostly driven by short-term expectations about the future of Brazil's economic policies. They initially rose 3.7 percent but later erased gains to drop 4.8 percent. Key Latin American stock indexes and currencies at 1850 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 1010.58 -0.14 0.93 MSCI LatAm 3063.99 -1.11 -3.2 Brazil Bovespa 54603.52 -0.9 6.01 Mexico IPC 44640.47 -0.07 4.48 Chile IPSA 3981.8 0.5 7.64 Chile IGPA 19410.78 0.44 6.49 Argentina MerVal 10115.97 -0.08 87.64 Colombia IGBC 12265.03 -1.96 -6.17 Peru IGRA 15235.47 -0.8 -3.29 Venezuela IBC 3000.67 -0.06 9.65 Currencies daily % YTD % change change Latest Brazil real 2.5260 -0.78 -6.70 Mexico peso 13.7705 -0.34 -5.38 Chile peso 600.7 -0.28 -12.42 Colombia peso 2162.2 0.02 -10.65 Peru sol 2.912 0.00 -4.09 Argentina peso 8.5200 0.03 -23.80 (interbank) Argentina peso 13.15 1.14 -23.95 (parallel) (Editing by Frances Kerry)
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