October 3, 2016 / 4:21 PM / a year ago

EMERGING MARKETS-Colombian markets fall, Brazil up after local votes

By Bruno Federowski
    SAO PAULO, Oct 3 (Reuters) - Colombia's stocks and currency
fell on Monday after voters rejected a peace deal with Marxist
FARC rebels, while Brazilian markets rose following municipal
    Many traders fear the Colombian vote could make it harder
for President Juan Manuel Santos' administration to gather
support for tax reform, a measure seen as crucial to maintain
the country's debt rating.  
    The government planned to unveil its tax reform plans to
lawmakers by Oct. 10, seeking to increase revenue by between 1
percent and 2 percent of gross domestic product.
    "It will be prudent to see how the dust settles, but the
market will likely price-in the risk of a downgrade to
Colombia's BBB rating," J.P.Morgan analysts wrote in a report.
    The Colombian peso weakened nearly 2 percent, eyeing
its biggest daily loss since Sept. 9, while the IGBC stock index
 slipped 0.5 percent.
    Brazilian stocks and the real currency both rose as
traders bet Brazil's President Michel Temer could find it easier
to approve painful fiscal measures in Congress after Sunday's
municipal elections.
    Political parties implicated in the Petrobras corruption
scandal suffered major setbacks in the elections and the leftist
Workers Party (PT), which has been spearheading efforts against
Temer's plans to cut spending, was the worst hit. 
    The Brazil equities rally was widespread, with all but three
stocks included in the benchmark Bovespa index in the
    Blue-chip stocks such as lenders Itaú Unibanco Holding SA
 and Bradesco SA, as well as
state-controlled oil company Petróleo Brasileiro SA 
 provided the biggest boosts to the index.
    Key Latin American stock indexes and currencies at 1555 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               910.04     0.73   13.77
 MSCI LatAm                         2399.56     0.79   30.11
 Brazil Bovespa                    59180.70     1.39   36.52
 Mexico IPC                        47200.42     -0.1    9.83
 Chile IPSA                         4022.76     0.19    9.31
 Chile IGPA                        20081.12     0.17   10.63
 Argentina MerVal                  16724.97     0.29   43.25
 Colombia IGBC                      9793.99    -0.54   14.59
 Venezuela IBC                     13104.02      1.1  -10.17
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.2356     0.46   21.99
 Mexico peso                        19.3475     0.13  -10.94
 Chile peso                           658.5    -0.21    7.78
 Colombia peso                      2936.24    -1.84    7.94
 Peru sol                              3.39    -0.27    0.71
 Argentina peso (interbank)         15.1600     1.02  -14.36
 Argentina peso (parallel)            15.61     0.64   -8.58

 (Reporting by Bruno Federowski; Editing by Andrew Hay)
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