EMERGING MARKETS-Brazil stocks jump on impeachment bets; real eases as cenbank acts
By Bruno Federowski SAO PAULO, April 13 (Reuters) - Brazilian stocks jumped 3.2 percent and hit their highest level in ten months on Wednesday amid expectations of President Dilma Rousseff's ouster, but the country's currency succumbed to the heightened intervention of the central bank. Brazil's lower house will vote on Sunday on whether to allow impeachment proceedings against the leftist President to advance to a Senate vote. Lawmakers' support for the survival of her government seemed to dwindle after the Progressive Party (PP) officially left the administration on Tuesday. The party's leader in the lower house said a majority of its 49 deputies supported impeachment. Brazil's stocks and currency have rallied for weeks as many traders bet that impeachment could rekindle trust in the embattled economy and ease the approval of austerity measures in Congress. Shares of state-controlled firms such as oil company Petroleo Brasileiro SA and lender Banco do Brasil SA rose, driving the benchmark Bovespa stock index to its highest since June 2015. But the Brazilian real fell sharply after the central bank stepped up its intervention to weaken the currency. The bank bought $3.15 billion in the markets through reverse currency swaps on Wednesday following an unprecedented $8 billion purchase the day before. BNP Paribas strategists praised the intervention, saying the real had appreciated beyond what was warranted by macroeconomic fundamentals. "In past interventions, the central bank has been too predictable ... all else being equal, 3.50 per U.S. dollar now seems to be the implicit floor for the real," strategists led by Gabriel Gersztein wrote in a client note. The move also helped reduce the central bank's exposure to foreign exchange movements stemming from the $100 billion in traditional currency swaps in its books. Elsewhere in the region, Mexico's IPC stock index was up nearly 0.9 percent while Chile's IPSA rose 0.49 percent. Key Latin American stock indexes and currencies at 1540 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 844.24 1.61 4.63 MSCI LatAm 2,233.40 1.86 19.83 Brazil Bovespa 53,663.93 3.2 23.79 Mexico IPC 45,479.22 0.86 5.82 Chile IPSA 3,973.12 0.49 7.96 Chile IGPA 19,461.45 0.45 7.22 Argentina MerVal 12,958.61 2.08 10.99 Colombia IGBC 10,154.50 0.77 18.80 Venezuela IBC 15,623.90 2.37 7.10 Currencies Latest Daily YTD pct pct change change Brazil real 3.5445 -1.49 11.36 Mexico peso 17.4965 -0.09 -1.52 Chile peso 668.7 0.67 6.13 Colombia peso 3,005.4 0.35 5.45 Peru sol 3.2611 0.03 4.69 Argentina peso (interbank) 14.3700 0.70 -9.66 Argentina peso (parallel) 14.87 0.94 -4.03 (Reporting by Bruno Federowski; additional reporting by Paula Arend Laier, editing by G Crosse)
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