April 28, 2016 / 2:18 PM / 2 years ago

EMERGING MARKETS-Latam markets gain on dovish signs from the U.S.

BRASILIA, April 28 (Reuters) - Latin American currencies and
stocks gained on Thursday after weak U.S. growth numbers and a
monetary policy statement by the Federal Reserve suggested a
smaller likelihood of interest rate hikes in the near future.
    Disappointing earnings limited gains in Brazilian stocks
though. The Bovespa index, close to a nearly one-year
high, remained steady as banks and consumer-related companies
missed profit expectations in the midst of a deep recession.
    As the Fed kept interest rates at 0.25 percent on Wednesday,
it acknowledged that economic growth has slowed, which was
confirmed by gross domestic product data on Thursday. Investors
read the message as a signal that the bank might refrain from
raising rates twice this year, as it currently predicts.
    The dollar fell against most currencies in Latin America and
other emerging markets. The Colombian peso was the best
performer, up more than 1 percent despite a slight drop in the
price of oil, a major export for the country.
    "The Fed's dovish tone weakens the dollar," Octavio de
Barros, chief economist at Brazilian bank Bradesco, said in a
research note. He forecast the next U.S. rate increase would
come in the second half of 2016.
    In Brazil, shares of Banco Bradesco SA fell more
than 2 percent after the bank missed first-quarter profit
estimates due to rising defaults. 
    Natura Cosmeticos SA shares dropped nearly 6
percent after the cosmetics company reported a net loss for the
first quarter. 
    Vale SA was an equities bright spot in Brazil.
Preferred shares rose more than 4 percent after the world's
largest iron ore producer beat analysts' forecasts with its
first profit in three quarters. It benefited from higher ore
prices and a stronger Brazilian real. 
    Key Latin American stock indexes and currencies at 1343 GMT:
 Stock                        Latest    daily %  YTD %
   indexes                              change   chang
 MSCI Emerging Markets        841.98    -0.14    6.17
 MSCI LatAm                   2273.53   0.42     23.73
 Brazil Bovespa               54492.47  0.03     25.70
 Mexico IPC                   45484.81  -0.99    5.83
 Chile IPSA                   3979.82   0.01     8.14
 Chile IGPA                   19557.26  0        7.74
 Argentina MerVal             0.00      0        -100.
 Colombia IGBC                10082.78  -0.04    17.96
 Venezuela IBC                15705.65  0        7.66
 Currencies                   Latest    daily %  YTD %
                                        change   chang
 Brazil real                  3.5070    0.42     12.55
 Mexico peso                  17.2650   0.32     -0.20
 Chile peso                   664.5     0.33     6.80
 Colombia peso                2892.02   1.40     9.59
 Peru sol                     3.2752    0.31     4.24
 Argentina peso (interbank)   14.1700   0.18     -8.38
 Argentina peso (parallel)    14.69     0.68     -2.86

 (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)
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