EMERGING MARKETS-Brazil assets jump as protests against Rousseff in 2nd day
By Bruno Federowski SAO PAULO, March 17 (Reuters) - Brazil's stocks and currency jumped on Thursday after the release of a taped conversation between President Dilma Rousseff and former President Luiz Inacio Lula da Silva roiled the country's political landscape and sparked a second straight day of mass demonstrations. Lula was sworn in as Rousseff's chief of staff earlier on Thursday following a clash between protesters and Workers Party supporters outside the presidential palace. However, soon after the swearing-in ceremony, a federal judge in Brasilia issued an injunction to suspend the appointment, citing the risk that the move would derail a judicial investigation. The tapped phone call bolstered opposition claims that Lula's nomination as Rousseff's chief of staff was more of an effort to shield him from a money laundering probe and sparked demands for her ouster. "The probability of President Rousseff finishing her term is minimal," analysts with Guide Investimentos wrote in a client note. Lula's appointment as a minister would provide him immunity from prosecution except from Brazil's Supreme Court. That could give him time to garner support in Congress, where lawmakers will vote on Rousseff's impeachment. Many traders believe a change in government would be the first step in recovering investors' trust in Latin America's largest economy. Brazil's benchmark Bovespa stock index jumped over 6 percent, eyeing its biggest daily gain since early 2009. State-controlled companies were among the biggest gainers, with shares in state-controlled Banco do Brasil SA jumping by as much as 20 percent. Embraer SA was one of the three Brazilian companies to buck the bullish trend, falling 3.1 percent. The Wall Street Journal reported that a sales consultant told prosecutors in Brazil he believes top officials at the planemaker, including CEO Frederico Curado, knew of illicit payments related to the sale of military aircraft to the Dominican Republic. The Brazilian real jumped 3.3 percent, leading the hefty gains in major Latin American currencies. The Chilean peso shot up to its highest against the U.S. dollar since August 2015 after the U.S. Federal Reserve projected two rate increases this year, half the number seen in December. A slower pace of U.S. policy tightening would benefit higher-risk emerging market assets, which generally offer higher returns. Key Latin American stock indexes and currencies at 1640 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 819.92 3.63 -0.37 MSCI LatAm 2,133.19 7.61 8.33 Brazil Bovespa 50,633.63 6.01 16.80 Mexico IPC 45,451.53 1.56 5.76 Chile IPSA 3,889.87 0.74 5.70 Chile IGPA 19,056.85 0.74 4.99 Argentina MerVal 12,965.63 3.38 11.05 Colombia IGBC 9,593.76 0.76 12.24 Venezuela IBC 14,988.37 1.43 2.74 Currencies Latest Daily YTD pct pct change change Brazil real 3.6170 3.31 9.12 Mexico peso 17.3915 1.16 -0.93 Chile peso 670.28 2.38 5.88 Colombia peso 3,071.1 2.90 3.20 Peru sol 3.379 -0.23 1.04 Argentina peso (interbank) 14.6250 -0.03 -11.23 Argentina peso (parallel) 15.46 -0.26 -7.70 (Reporting by Bruno Federowski, additional reporting by Paula Arend Laier; editing by G Crosse)
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