EMERGING MARKETS-Brazil shares, currency down on political woes; Petrobras drops
By Bruno Federowski and Paula Arend Laier SAO PAULO, April 4 (Reuters) - Brazil's stocks and currency underperformed most Latin American peers on Monday as traders worried that President Dilma Rousseff's efforts to fight impeachment could prolong the country's already year-long political crisis. Also pressuring shares of Petroleo Brasileiro SA was news the state-controlled oil company could cut fuel prices, reducing the indebted company's revenues. Petrobras, as the company is known, kept gasoline and diesel prices artificially low for years, but made up for some of those losses with hikes last year. A decrease would reflect lower oil prices abroad and weak demand at the recession-mired economy, local media reported over the weekend. "Despite these undeniably fair grounds, why do it now?" analysts with BTG Pactual wrote in a client note. "With the entire investment community avidly monitoring Brazil's political agenda, the timing of such a decision could be heavily misinterpreted, negating some of the hard work done in regaining investor confidence." Shares of sugar- and ethanol-related companies, such as Cosan SA Industria e Comercio, fell on the news. Traders also worried that a recent rally in Brazilian assets, triggered by expectations of leftist President Rousseff's ouster, could be overdone. Some cited nascent expectations that the government could gather enough votes in Congress to avoid her impeachment. Other Latin American currencies also weakened on the back of lower crude prices and expectations of higher U.S. interest rates. Boston Federal Reserve President Eric Rosengren said on Monday the U.S. central bank will likely raise rates sooner than markets currently expect, a move which could drain capital away from high-yielding emerging markets. Those expectations helped drive the Colombian peso lower, even after minutes from the central bank's last policy meeting hinted it will continue tightening policy over the following months. Key Latin American stock indexes and currencies at 1600 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 826.49 0.04 4.04 MSCI LatAm 2121.18 -1.86 18.12 Brazil Bovespa 49475.79 -2.15 14.13 Mexico IPC 45776.11 -0.62 6.51 Chile IPSA 3938.77 -0.22 7.03 Chile IGPA 19301.92 -0.2 6.34 Argentina MerVal 13027.11 -1.15 11.58 Colombia IGBC 9863.96 -0.26 15.40 Venezuela IBC 14621.95 -1.95 0.23 Currencies daily % YTD % change change Latest Brazil real 3.5973 -1.03 9.72 Mexico peso 17.4575 -0.66 -1.30 Chile peso 671.2 -0.30 5.74 Colombia peso 3071.95 -1.12 3.17 Peru sol 3.3581 -0.51 1.66 Argentina peso (interbank) 14.7750 0.17 -12.13 Argentina peso (parallel) 15.17 0.26 -5.93 (Editing by James Dalgleish)
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