June 27, 2017 / 2:25 PM / a year ago

EMERGING MARKETS-Brazil markets down after Temer charged with corruption

    By Bruno Federowski
    SAO PAULO, June 27 (Reuters) - Brazil's stocks and currency
slipped on Tuesday after the country's top federal prosecutor
charged President Michel Temer with taking multimillion-dollar
    In a document submitted to the Supreme Court, Rodrigo Janot
said Temer "fooled Brazilian citizens" and owed the nation
millions in compensation for accepting bribes. The lower house
of Congress must now vote on whether to allow the tribunal to
try the conservative leader.
    Traders expect Temer to garner the support of one-third of
the lower house needed to block the trial, although some fear
his backing may melt away if lawmakers are forced to vote
several times to protect the unpopular president.
    The vote, which does not yet have a date, is likely to delay
the implementation of Temer's planned reforms of the pension
system and labor regulations, seen by investor as key to curb
debt and lift long-term economic growth.
    The Brazilian real weakened 0.7 percent, while 5-year
credit default swaps widened 2 basis points to 237 basis points.
    Brazil's benchmark Bovespa stock index fell 0.3
percent, dragged down by blue-chips such as lenders Itaú
Unibanco Holding SA, Banco Bradesco SA and
beer producer Ambev SA.
    Shares of Kroton Educacional SA and Estácio
Participações SA ranked among the biggest decliners
on lingering concerns that regulators may veto a tie-up between
both college operators.
    Losses in the index were capped, however, by a rally in
shares of miners and steelmakers, such as Vale SA and
Cia Siderúrgica Nacional SA, boosted by soaring
prices of metals.
    Other Latin American markets were mostly down as traders
avoided risky bets ahead of a widely awaited speech by U.S.
Federal Reserve Chair Janet Yellen later in the day.
    Investors will closely monitor her remarks for clues over
future monetary policy after a recent batch of mixed economic
figures suggested it may be forced to increase rates at a slower
pace than expected.
    The Mexican peso slipped 0.7 percent after touching
a 13-month peak on Monday, while the country's benchmark S&P/BVM
IPC stock index was down 0.3 percent.    
    Key Latin American stock indexes and currencies at 1350 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
 MSCI Emerging Markets               1017.26    -0.18    18.19
 MSCI LatAm                          2514.87    -0.65     8.14
 Brazil Bovespa                     62031.26    -0.25     3.00
 Mexico S&P/BVM IPC                 49033.48    -0.27     7.43
 Colombia IGBC                      10651.23     0.21     5.17
 Venezuela IBC                     122470.40     0.22   286.28
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.3245    -0.71    -2.27
 Mexico peso                         17.9855    -0.67    15.34
 Chile peso                            661.5    -0.15     1.39
 Colombia peso                       3024.11    -0.25    -0.75
 Argentina peso (interbank)          16.3150     0.03    -2.70
 Argentina peso (parallel)             16.62    -0.36     1.20

 (Reporting by Bruno Federowski; Editing by Nick Zieminski)
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