July 25, 2017 / 4:40 PM / a year ago

EMERGING MARKETS-Brazil stocks hit one-month high on commodities boost

    By Bruno Federowski
    SAO PAULO, July 25 (Reuters) - Brazilian stocks hit a one-month high on
Tuesday as a rally in the prices of commodity boosted shares of local blue-chips
Vale SA and Petróleo Brasileiro SA.
    China-listed iron ore futures also snapped a three-day losing streak on the
back of China's strong steel sector, lifting shares in Vale, the
world's largest iron ore miner. Bradespar SA, a key Vale shareholder,
were the biggest gainers on Brazil's benchmark Bovespa stock index. 
    Rising crude futures also lifted shares of Petrobras, as
Brazil's state-controlled oil company is known, after major producer Saudi
Arabia vowed to reduce exports next month to curb global oversupply.
    Gains on the benchmark index were limited by shares of Fibria SA
after the wood pulp producer posted a surprising quarterly net loss as a weaker
currency inflated its debt.
    Operating profits rose, supported by higher pulp prices and strong global
demand, but analysts said that boost is likely to fade in coming quarters.
    "Although the market is already pricing in lower pulp prices, we believe
sentiment will deteriorate further when pulp prices start to correct," UBS
Securities analysts wrote in a note to clients.
    Most Latin American currencies seesawed as traders awaited the U.S. Federal
Reserve's policy decision to be announced on Wednesday.
    Money markets indicated a near-zero chance of an interest rate increase from
the U.S. central bank, following a recent batch of weaker-than-expected economic
data that fostered bets on a slow path of policy tightening in coming months.
That could foster demand for Latin American assets, which typically lure
investors with higher yields.
    Brazil's central bank will announce a rate decision on the same day and
traders widely expect it to cut rates by an aggressive 100 basis points.

    Key Latin American stock indexes and currencies at 1630 GMT:
 Stock indexes                       Latest     Daily    YTD
                                                 pct     pct
                                               change   change
 MSCI Emerging Markets               1,060.39    -0.36   23.43
 MSCI LatAm                          2,733.39     -0.1   16.89
 Brazil Bovespa                     65,532.57     0.67    8.81
 Mexico S&P/BVM IPC                 51,689.61     0.05   13.25
 Chile IPSA                          5,015.84     -0.1   20.82
 Chile IGPA                         25,057.77    -0.08   20.85
 Argentina MerVal                   21,211.66    -0.46   25.38
 Colombia IGBC                      10,939.52     0.08    8.01
 Venezuela IBC                     133,413.77     0.67  320.79
 Currencies                          Latest     Daily    YTD
                                                 pct     pct
                                               change   change
 Brazil real                           3.1705    -0.74    2.48
 Mexico peso                          17.7600    -0.15   16.80
 Chile peso                            649.11     0.39    3.33
 Colombia peso                       3,025.63     0.04   -0.80
 Peru sol                               3.248    -0.06    5.11
 Argentina peso (interbank)           17.4100     0.29   -8.82
 Argentina peso (parallel)              18.01     0.22   -6.61
 (Reporting by Bruno Federowski, editing by G Crosse)
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