May 9, 2018 / 4:21 PM / 5 months ago

EMERGING MARKETS-Argentina stocks jump as gov't seeks IMF financing

    SAO PAULO, May 9 (Reuters) - Argentina's MerVal stocks index
 shot higher on Wednesday, just a day after the
government said it had initiated financing talks with the
International Monetary Fund.
    After a volatile period for Argentina's peso
currency and the MerVal on Tuesday, President Mauricio Macri
announced Latin America's third largest economy would seek a
financing deal with the IMF to stabilize the economy.

    A weakening peso had spurred the central bank to the raise
the benchmark interest rate some 1,275 basis points since April
27. The MerVal had fallen some 12 percent over the last 12
sessions.
    Market participants viewed a potential IMF deal as positive,
while warning that the move is unusual given that the fund
usually makes such deals with less economically frenetic
countries.
    "In general, flexible credit lines have been given to
countries with a solid track record when its comes to inflation
and fiscal accounts," said Jorge Mariscal, emerging markets
chief investment officer at UBS Global Wealth Management. 
    "If Argentina gets any help from the IMF, it would increase
the odds of successfully navigating the current turbulence and
allow the Macri administration to deepen the reform process."
    Argentina's Merval had gained 3.84 percent by midday,
slightly paring gains after rising over 4 percent in morning
trade.
    Across the region, Mexico's IPC equities index posted
the largest losses, falling 1.06 percent as traders said spirits
were subdued by reports the United States had rejected Mexico's
latest auto sector proposal during North American Free Trade
Agreement negotiations.
    In currency markets, Brazil's real was the biggest
regional loser, falling 0.78 percent after central bank
president Ilan Goldfajn gave a dovish speech that boosted bets
on a benchmark Selic rate cut next week.
    "With the speech of the central bank president, bets on a
new 25-basis-point cut to the Selic rate should gain steam,"
brokerage Renascença Corretora wrote in a note to clients.
    
Key Latin American stock indexes and currencies at 1522 GMT:
    
 Stock indexes             Latest          Daily   YTD pct
                                             pct    change
                                          change  
 MSCI Emerging Markets        1,143.22      0.05     -1.36
                                                  
 MSCI LatAm                   2,799.26      0.06     -1.08
                                                  
 Brazil Bovespa              83,392.43      0.53      9.15
 Mexico IPC                  46,225.16     -1.06     -6.34
 Chile IPSA                   5,661.50       0.3      1.74
 Chile IGPA                  28,541.54      0.34      2.00
 Argentina MerVal            27,282.39      3.83     -9.26
 Colombia IGBC               12,415.16      0.73      9.19
 Venezuela IBC               17,365.19     -1.06   1274.76
                                                          
 Currencies                     Latest     Daily   YTD pct
                                             pct    change
                                          change  
 Brazil real                    3.5961     -0.78     -7.86
 Mexico peso                   19.5395      0.18      0.82
 Chile peso                     631.45      0.38     -2.66
 Colombia peso                2,852.16      0.64      4.55
 Peru sol                        3.292     -0.12     -1.67
 Argentina peso                22.6000      0.00    -17.70
 (interbank)                                      
 Argentina peso                  22.85     -0.66    -15.84
 (parallel)                                       
 
 (Reporting by Gram Slattery; additional reporting by Rodrigo
Campos in New York and Miguel Angel Gutiérrez in Mexico City)
  
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