EMERGING MARKETS-Colombian markets fall, Brazil up after local votes
(New throughout, updates prices and market activity, adds Chile growth forecast) By Bruno Federowski SAO PAULO, Oct 3 (Reuters) - Colombia's stocks and currency fell on Monday after voters rejected a peace deal with Marxist FARC rebels, while Brazilian markets rose following municipal elections. Many traders fear the Colombian vote could make it harder for President Juan Manuel Santos' administration to gather support for tax reform, a measure seen as crucial to maintain the country's debt rating. The government planned to unveil its tax reform plans to lawmakers by Oct. 10, seeking to increase revenue by between 1 percent and 2 percent of gross domestic product. "It will be prudent to see how the dust settles, but the market will likely price-in the risk of a downgrade to Colombia's BBB rating," J.P.Morgan analysts wrote in a report. The Colombian peso weakened nearly 2 percent before closing down 1.63 percent, while the IGBC stock index slipped 0.36 percent. Brazilian stocks rose as traders bet Brazil's President Michel Temer could find it easier to approve painful fiscal measures in Congress after Sunday's municipal elections. Political parties implicated in the Petrobras corruption scandal suffered major setbacks in the elections and the leftist Workers Party (PT), which has been spearheading efforts against Temer's plans to cut spending, was the worst hit. Blue-chip stocks such as lenders Itaú Unibanco Holding SA and Bradesco SA, as well as state-controlled oil company Petróleo Brasileiro SA provided the biggest boosts to the index. Meanwhile, Chile's economy is expected to recover from a weak 2016 to grow 2.25 percent in 2017, Finance Minister Rodrigo Valdes said on Monday. The Chilean government expects the economy of the top copper exporter to grow 1.75 percent in 2016, which would be the slowest expansion since a 2009 recession. Key Latin American stock indexes and currencies at 2100 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 911.61 0.9 14.79 MSCI LatAm 2416.27 1.49 32.05 Brazil Bovespa 59461.23 1.87 37.17 Mexico IPC 47601.93 0.75 10.76 Chile IPSA 4036.95 0.54 9.69 Chile IGPA 20145.84 0.5 10.99 Argentina MerVal 16846.88 1.02 44.30 Colombia IGBC 9811.86 -0.36 14.79 Venezuela IBC 13114.61 1.18 -10.10 Currencies daily % YTD % change change Latest Brazil real 3.2105 -0.19 22.94 Mexico peso 19.2955 0.39 11.99 Chile peso 660 -0.44 7.53 Colombia peso 2930 -1.63 8.17 Peru sol 3.381 0.00 0.98 Argentina peso (interbank) 15.1900 0.82 -14.53 Argentina peso (parallel) 15.6 0.71 -8.53 (Reporting by Bruno Federowski; Editing by Andrew Hay and David Gregorio)
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