(Recasts throughout, updates prices)
By Susan Mathew
Feb 1 (Reuters) - Most Latin American stocks rose on Friday
after U.S. economic data pointed to the possibility that the
Federal Reserve could keep interest rates unchanged.
Shares extended their rally after U.S. employment and
manufacturing data underscored a strong economy with little wage
inflation. Prices in the U.S. futures markets show traders see
no rate hikes ahead by the Fed a day after it said it would be
patient with hikes.
"The story being told here is the (U.S.) economy is healthy
but inflation continues to face challenges," said Yousef Abbasi,
global market strategist at INTL FCStone Financial Inc. "This
makes even more a compelling argument for the stock market."
Brazil's Bovespa stock index rose half a percent and
posted a fourth straight day of gains, while most other regional
indexes rose between 0.8 percent to 0.9 percent.
Mexican shares, however, fell 0.5 percent, but
managed to make gains over the week. World markets that were
gaining on strong U.S. job data, turned negative after Amazon's
gloomy outlook cut some of Wall Street's gains.
Meanwhile, Mexico's currency broke a nine-week winning
streak. On the day, the peso was little changed.
A senior analyst at Fitch said that Mexico's government does
"not necessarily" face a credit rating downgrade by Fitch if the
rating for debt issued by state-owned oil company Pemex were cut
again. Fitch's Pemex downgrade had spurred a fall in the
peso.
While most other regional currencies eked out gains against
a steady dollar, the Brazilian real weakened 0.4 percent
after five straight days of gains as Congress and Senate
elections progressed.
Investors were keeping a close eye on elections for
leadership in Brazil's congress, with the likely victor in the
House, Rodrigo Maia, seen as a known quantity positive for the
reform agenda of far-right President Jair Bolsonaro.
There was more uncertainty about the outcome in the Senate,
where a close contest was expected between veteran Senator Renan
Calheiros and Davi Alcolumbre. While reports said Maia had won
the backing of Bolsonaro's Finance Minister Paulo Guedes, others
said any of the top candidates were likely to advance a crucial
pension reform law.
"There are very positive expectations with regard to the
candidates' names," a trader with a local bank said. "If these
expectations are confirmed, there should be a strengthening of
the real given the prospects for the pension reform to pick up
steam."
Key Latin American stock indexes and currencies at 2132 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1050.20 0.03
MSCI LatAm 2950.44 0.1
Brazil Bovespa 97861.27 0.48
Mexico IPC 43788.77 -0.45
Chile IPSA 5452.97 0.88
Argentina MerVal 36599.88 0.75
Colombia IGBC 11935.08 0.9
Currencies Latest Daily %
change
Brazil real 3.6578 0.07
Mexico peso 19.1020 0.02
Chile peso 653.8 0.24
Colombia peso 3087.9 0.50
Peru sol 3.329 -0.06
Argentina peso 37.1500 0.54
(interbank)
(Reporting by Susan Mathew in Bengaluru; additional reporting
by Herbert Lash in New York
Editing by Alistair Bell)