December 5, 2016 / 3:52 PM / 2 years ago

EMERGING MARKETS-Brazil real strengthens after weekend corruption protests

By Bruno Federowski
    SAO PAULO, Dec 5 (Reuters) - The Brazilian real strengthened
on Monday on trader relief that  mass weekend demonstrations
refrained from directly targeting President Michel Temer.
    Demonstrators protested across Brazil on Sunday to denounce
corruption and a congressional vote seen as an attempt to
curtail sweeping graft investigations.
    Some investors had feared the weekend protests would take
aim at Temer, whose approval rates remain near record lows,
potentially hampering his administration's efforts to gather
lawmaker support for austerity measures.
    "Protesters can demonstrate against Congress. As long as
they don't demonstrate against the government, the market will
remain calm," said Thiago Castellan, a trader with Renascença
    The Brazilian real strengthened 0.5 percent after
weakening 1.7 percent last week. Other Latin American currencies
were mixed, with the Colombian peso rising 0.8 percent on
the back of higher crude prices.
    Brazilian stocks seesawed as a drop in financial
shares helped offset a two-day rally in shares of
Braskem SA, Latin America's largest petrochemical
    The stock reached a record high on Monday after it said on
Friday it is in advanced talks with authorities in Brazil and
the United States for a leniency agreement related to a massive
corruption scandal. 
    Analysts at JPMorgan Securities upgraded their
recommendation on U.S.-listed shares of Braskem to "overweight"
from "neutral," citing the leniency accord negotiations.
    Wider emerging markets largely shrugged off political
uncertainty in Italy after its prime minister resigned following
a crushing defeat in a referendum over constitutional reform.
    Currencies such as the Polish zloty and Czech crown
 that have the closest trade ties to the euro zone
initially fell on the news but later pared back losses. 

    Key Latin American stock indexes and currencies at 1500 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               854.70     0.19     7.42
 MSCI LatAm                         2261.05     0.57    22.87
 Brazil Bovespa                    60443.61     0.21    39.43
 Mexico IPC                        44926.82     0.83     4.54
 Chile IPSA                         4207.26      0.1    14.32
 Chile IGPA                        21009.17     0.09    15.74
 Argentina MerVal                  17000.84     0.31    45.62
 Colombia IGBC                      9774.24      0.5    14.35
 Venezuela IBC                     38563.85     0.21   164.35
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.4536     0.50    14.29
 Mexico peso                        20.6250     0.07   -16.46
 Chile peso                          668.15     0.43     6.22
 Colombia peso                      3058.91     0.82     3.61
 Peru sol                              3.42    -0.09    -0.18
 Argentina peso (interbank)         15.9450     0.03   -18.58
 Argentina peso (parallel)            16.29     0.37   -12.40
 (Reporting by Bruno Federowski; Editing by Bill Trott)
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