EMERGING MARKETS-Brazil stocks, currency slump on Lula cabinet nod

martes 15 de marzo de 2016 18:04 GYT

(Updates with closing prices)
    By Bruno Federowski
    SAO PAULO, March 15 (Reuters) - Brazil's stocks and currency
fell on Tuesday on news that former President Luiz Inacio Lula
da Silva had accepted a cabinet position in President Dilma
Rousseff's government, possibly reducing support among lawmakers
for her ouster.
    Investors also feared the move could herald a return to
fiscal stimulus policies that many blame for dragging Brazil
into what could be its deepest recession on record.
    Lula, long the public face of Rousseff's Workers Party, is
facing charges of money laundering as part of the biggest
corruption probe in the country's history, centered on
state-controlled oil company Petroleo Brasileiro SA, also known
as Petrobras. 
    Presidential aides said Lula had decided to accept a
ministerial position in Rousseff's Cabinet, a move that would
offer him protection in the short term from prosecutors who have
charged him with money laundering and fraud. 
    It could also give him time to negotiate with Rousseff's
allies in Congress, who have all but jumped ship as calls for
her impeachment grow.
    "This is the government's last defense against an
impeachment," said Francisco Carvalho, head FX trader at BGC
Liquidez brokerage in São Paulo.
    Brazil's stocks and currency slid on Tuesday after reaching
their highest since mid-2015 on Friday ahead of massive
demonstrations against the President.
    The real lost 3.03 percent against the U.S. dollar,
while the Bovespa stock index fell 3.56 percent. 
    Shares of Petrobras slumped more than 10 percent,
their worst daily performance in over a year, also hit by a drop
in crude oil  prices. 
    Shares of state-run lender Banco do Brasil SA 
tumbled 21.2 percent on fears that the government could use
public credit to stimulate economic growth.
    In Mexico, the peso fell nearly 1 percent against the
dollar, while the IPC stock index dropped 1.08 percent. 

    Key Latin American stock indexes and currencies at 1540 GMT:
 Stock indexes               Latest          Daily   YTD pct
                                               pct    change
 MSCI Emerging Markets            790.68     -1.59     -0.44
 MSCI LatAm                     1,980.50     -3.86      8.24
 Brazil Bovespa                47,130.02     -3.56      8.72
 Mexico IPC                    44,210.44     -1.08      2.87
 Chile IPSA                     3,851.28     -0.14      4.65
 Chile IGPA                    18,872.13      -0.1      3.97
 Argentina MerVal              12,076.37     -3.74      3.44
 Colombia IGBC                  9,492.49     -1.21     11.06
 Venezuela IBC                 15,292.30     -1.83      4.83
 Currencies                       Latest     Daily   YTD pct
                                               pct    change
 Brazil real                       3.763     -3.03       N/A
 Mexico peso                      17.887      -0.8       N/A
 (Reporting by Bruno Federowski; Editing by Gabriel Stargardter,
Simon Gardner and James Dalgleish)