May 12, 2017 / 3:35 PM / a year ago

EMERGING MARKETS-Mexico peso tumbles to weakest since surprise rate hike

    By Bruno Federowski
    SAO PAULO, May 12 (Reuters) - Brazilian stocks rose on
Friday for the fourth straight day as Petróleo Brasileiro SA
 shares hit an 11-week high after the state-controlled
oil company reported its strongest operating profit ever.
    Preferred shares of Petrobras, as the company is known,
jumped as much as 5.1 percent after earnings before interest,
tax, depreciation and amortization rose 19 percent to 25.254
billion reais ($8.1 billion), beating the consensus forecast by
1.38 billion reais.
    UBS Securities analysts said the results were only the tip
of an "iceberg of hidden value" and that the stock would
probably keep performing well.
    "We reiterate our positive view for Petrobras investment
case and expect to see the hidden part of this iceberg, which
should generate value for equity holders," analysts led by Luiz
Carvalho wrote in a note to clients.
    Health insurer Qualicorp SA was the biggest
gainer, touching an all-time high after first-quarter profit
fell less than expected and analysts increased their
recommendations on the stock.
    Petrobras and Qualicorp accounted for more than half of the
0.8 percent gain for Brazil's benchmark Bovespa stock index
. The move also reflected a recent pickup in appetite for
emerging market assets, tracking recent strength in the euro
 and global weakness in the U.S. dollar.
    U.S. President Donald Trump's unexpected firing of FBI head
James Comey fueled expectations of delays to the implementation
of his pledges of heavy spending and tax cuts, which had stoked
bets on a fast pace of U.S. interest rate hikes in coming
    Currencies from Mexico, Brazil, Chile and Colombia
strengthened between 0.1 percent and 0.4 percent, supported by
expectations that a slower pace of rate hikes could bolster
demand for high-yielding assets.
    Key Latin American stock indexes and currencies at 1520 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets              1002.27     0.19    16.01
 MSCI LatAm                         2712.37     1.28    14.42
 Brazil Bovespa                    68055.92     0.77    13.00
 Mexico IPC                        49342.25    -0.38     8.10
 Chile IPSA                         4838.00     0.36    16.54
 Chile IGPA                        24256.79     0.35    16.99
 Argentina MerVal                  21579.10     0.71    27.55
 Colombia IGBC                     10674.51     0.85     5.40
 Venezuela IBC                     60572.41     0.08    91.05
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.1292     0.44     3.83
 Mexico peso                        18.7690     0.39    10.52
 Chile peso                           671.2     0.09    -0.07
 Colombia peso                      2915.43     0.35     2.95
 Peru sol                              3.28     0.21     4.09
 Argentina peso (interbank)         15.4200     0.19     2.95
 Argentina peso (parallel)            15.87     0.32     5.99
 (Reporting by Bruno Federowski; Editing by Lisa Von Ahn)
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