EMERGING MARKETS-Brazil stocks, currency jump on PMDB defection prospects
By Bruno Federowski SAO PAULO, March 28 (Reuters) - Brazil's stocks and currency rose on Monday on prospects that the biggest party in the government coalition was about to defect, weakening President Dilma Rousseff's defense against impeachment proceedings in Congress. The Brazilian Democratic Movement Party (PMDB), Brazil's largest political party, appears poised to decide on Tuesday to withdraw its support from Rousseff's administration. . Rousseff's impeachment, if it materializes, would put the government in the hands of Vice President Michel Temer, leader of the PMDB, who is reported to be working on policies including sweeping welfare cuts if he comes to power. "The market sees the PMDB's defection as the beginning of the end for Rousseff's government," said Jose Carlos Amado, a trader with the Spinelli brokerage in Sao Paulo. Brazil's stocks and currency have rallied as expectations of Rousseff's ouster grew, driving the central bank to act to weaken the real. Many blame the leftist president's economic interventions for pushing Brazil into a deep economic crisis. On Monday, shares of state-controlled companies such as Petroleo Brasileiro SA and Banco do Brasil SA were among the biggest gainers on Brazil's benchmark stock index. Shares of Companhia de Saneamento Basico do Estado de Sao Paulo jumped almost 3 percent after the state water utility reported an almost fifteen-fold increase in net profit in the fourth quarter. The company asked regulators to end discounts to customers who cut their water use amid Brazil's worst draught in decades. Trading volumes were thin in most Latin American markets after an extended weekend due to Easter holidays. Key Latin American stock indexes and currencies at 1505 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 813.19 0.11 2.29 MSCI LatAm 2121.81 1.98 13.7 Brazil Bovespa 50543.99 1.79 16.60 Mexico IPC 45688.94 0.09 6.31 Chile IPSA 3890.46 0.14 5.71 Chile IGPA 19076.20 0.11 5.09 Argentina MerVal 12688.67 1.51 8.68 Colombia IGBC 9657.06 -1.04 12.98 Venezuela IBC 14869.75 -0.59 1.93 Currencies daily % YTD % change change Latest Brazil real 3.6426 0.91 8.36 Mexico peso 17.4900 0.34 -1.49 Chile peso 680.4 0.04 4.31 Colombia peso 3055 0.56 3.74 Peru sol 3.3401 1.14 2.21 Argentina peso (interbank) 14.5800 -0.21 -10.96 Argentina peso (parallel) 15.26 0.26 -6.49 (Additional reporting by Priscila Jordão Editing by W Simon)
© Thomson Reuters 2016 All rights reserved.