EMERGING MARKETS-Brazil assets jump as protests against Rousseff in 2nd day
(Adds broader regional view, updates prices) 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. Most Latin American currencies also rose, with the Chilean peso gaining 2.4 percent, its biggest jump in seven years, after the U.S. Federal Reserve signaled a slower pace of policy tightening, bolstering emerging market assets. The tapped phone call bolstered Brazilian 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. 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 6.6 percent, its biggest daily rise since early 2009. State-controlled companies were among the biggest gainers, with shares in state-controlled Banco do Brasil SA jumping as much as 20 percent. The Brazilian real rose as much as 3 percent, its biggest daily spike in nearly half a year, leading hefty gains in major Latin American currencies after the Fed signaled a dovish stance and oil prices hit their highest this year. The Fed's planned two rate increases this year, half the number seen in December, would benefit higher-risk emerging markets, which generally offer higher returns. Currencies in commodity exporters like Chile and Colombia were also supported by higher oil prices, which surged on optimism that major producers would strike an output freeze deal next month. The Chilean peso shot up to its highest against the U.S. dollar since the end of July, while Colombia's currency rose to its highest in nearly four months. In Mexico, the peso shot up 1.6 percent, nearly erasing its losses for the year, while the benchmark stock index rose to its highest since early November. Key Latin American stock indexes and currencies at 2100 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 816.90 3.25 2.87 MSCI LatAm 2,138.82 7.9 16.89 Brazil Bovespa 50,913.79 6.6 17.45 Mexico IPC 45,435.09 1.53 5.72 Chile IPSA 3,898.11 0.96 5.92 Chile IGPA 19,091.19 0.92 5.18 Argentina MerVal 12,972.54 3.43 11.11 Colombia IGBC 9,606.28 0.9 12.39 Venezuela IBC 14,991.00 1.45 2.76 Currencies Latest Daily YTD pct pct change change Brazil real 3.6505 2.31 7.51 Mexico peso 17.318 1.57 -0.51 Chile peso 669.6 2.42 5.65 Colombia peso 3,069.53 2.87 3.15 Peru sol 3.3691 0.06 1.32 Argentina peso (interbank) 14.9000 -1.92 -14.77 Argentina peso (parallel) 15.53 -0.71 -8.83 (Reporting by Bruno Federowski, additional reporting by Paula Arend Laier and Anna Yukhananov; Editing by G Crosse and Dan Grebler)
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