EMERGING MARKETS-Latam currencies down on Fed outlook; bank stocks rise
RIO DE JANEIRO, March 30 (Reuters) - Latin American currencies traded mostly weaker on Monday, tracking global dollar strength, while banking shares supported local stock markets. The dollar rallied after comments last Friday from U.S. Federal Reserve chair Janet Yellen underscored the view that U.S. interest rates are likely to rise gradually later this year. The Brazilian real sank as low as 3.288 to the dollar though it continued to see technical support at the 3.29 level for a second week. The currency is down more than 12 percent in March on concerns over weak economic growth and political wrangling over a fiscal adjustment seen as critical to ward off a sovereign credit downgrade. The concerns were fed over the weekend on reports that Finance Minister Joaquim Levy mildly criticized President Dilma Rousseff's economic management in a closed seminar with former students from his alma mater. "We're following the markets abroad today, but we also have some domestic noise, principally on the Levy question," said Silvio Campos Neto, an economist with consulting firm Tendencias in Sao Paulo. Other currencies in the region weakened as well, with Chile's peso posting its biggest intraday loss in over a week after the central bank raised its outlook for year-end inflation on Monday. In equities markets, Brazil's Bovespa stock index gained for the first session in three, boosted by shares of lender Itau Unibanco Holding SA. Global macro funds have taken an interest in Brazilian banks on the perception that Levy will be able to push through fiscal measures, according to a report from UBS Securities analysts on Monday. Some investors also see the real's weakness as overdone and view valuations as favorable, given "positive earnings momentum," the report said. Shares of electric utility Companhia Energética de São Paulo SA soared their most in over a year after the company announced late Friday that it would distribute 1.58 billion reais ($486.2 million) in dividends. Shares of planemaker Embraer SA rose 4 percent after it announced an order from Air France-KLM Group on Monday. Financial shares also helped support Mexico's IPC stock index and Chile's IPSA index, both of which gained for the second straight session. ($1 = 3.25 Brazilian reais) Key Latin American stock indexes and currencies at 1606 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 968.24 1.06 0.19 MSCI LatAm 2423.77 0.78 -11.83 Brazil Bovespa 50967.95 1.74 1.92 Mexico IPC 43942.82 0.7 1.85 Chile IPSA 3897.99 0.35 1.22 Chile IGPA 19015.42 0.31 0.77 Argentina MerVal 10977.819 2.94 27.96 Colombia IGBC 9945.82 0.38 -14.52 Peru IGRA 12344.66 -0.25 -16.56 Venezuela IBC 4816.05 -5.48 24.81 Currencies daily % YTD % change change Latest Brazil real 3.2540 -0.48 -18.33 Mexico peso 15.2443 -0.03 -3.28 Chile peso 626.5 -0.56 -3.21 Colombia peso 2576.99 -0.74 -7.33 Peru sol 3.096 -0.10 -3.78 Argentina peso 8.8125 -0.03 -2.98 (interbank) Argentina peso 12.65 1.03 10.67 (parallel) (Reporting by Asher Levine and Flavia Bohone; Editing by Jeffrey Benkoe)
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