February 22, 2019 / 10:34 PM / 3 months ago

EMERGING MARKETS-Latam stocks, FX buoyed by hopes of U.S.-China trade deal

 (Recasts throughout, updates prices, adds market strategist
    By Aaron Saldanha
    Feb 22 (Reuters) - Latin American stock markets ended the
week on a strong note, buoyed by broad-based optimism of a deal
to end the U.S.-China trade dispute, while currencies in Latin
America firmed against a softer dollar.
    Assets in Latin America were buoyed by U.S. President Donald
Trump saying there was a good chance of a deal with China to end
their trade war and that he was inclined to extend his March 1
deadline for raising tariffs in no deal were reached by then.

    Hopes of improved trade ties have led investors to favor
developing world assets of late. A heavily traded ETF focused on
emerging market equities has seen inflows worth about
0.63 percent of assets, Lipper estimates for the week ended
Wednesday show. 
    David Asryan of New York brokerage Auerbach Grayson, said
Latin America assets, especially those in commodity-centric
economies, were performing strongly due to expectations of
improved demand from key buyer China.
    "The whole region gets ahead every time there is something
to do with commodities ...just because of their high reliance,"
he said.    
    MSCI's index of Latin American stocks rose 1
percent on gains across the region.
    Chile's stocks index added 0.8 percent, while
the local peso rose half a percent as it tracked a rise
in the price of top Chilean export copper, which hit a
seven-and-a-half-month peak.    
    Sao Paulo-traded stocks rose 1 percent, aided by
broad-based gains as companies reported financial results.
    Top gainer Magazine Luiza surged 10.4 percent on
a strong forecast to go along with a 14.5 percent rise in
fourth-quarter profit. 
    A 0.7 percent firming for Mexico's peso helped the
currency wipe away losses incurred in the past few days.
    State-owned oil company Pemex has been a focus of investors
this week, with minutes released from the central bank's latest
policy meeting reflecting concerns of a knock-on effect to
Mexico's finances if the firm's credit is downgraded again.

    Auerbach Grayson's Asryan said of all the Mexican
government's policies, its intentions to improve the efficiency
of Pemex carries the most risk.
    "Pemex is something I talk about every day with clients.
It's a major theme for pretty much anyone who is looking at
Mexico. I believe 80 to 90 percent of all Pemex's EBITDA goes
into government revenues," he said.
    Mexican stocks rose 0.4 percent, propped up by
materials and financials.
    Gains were tempered by an 8 percent slide in media firm
Televisa on weak earnings and comments by Co-Chief
Executive Alfonso de Angoitia that a spinoff of business units
would not benefit shareholders.
    Argentina's stocks benchmark jumped 2.2 percent on
gains among energy stocks and financials, while the country's
peso firmed as the central bank raised rates on
short-term notes, or Leliqs, to absorb excess peso liquidity.
    Colombia's peso firmed 0.5 percent, while local
stocks ended 0.9 percent higher, aided by a 0.7 percent
rise in oil firm Ecopetrol SA. 
    Key Latin American stock indexes and currencies at 2147 GMT
 Stock indexes                                      daily %
                                        Latest       change
 MSCI Emerging Markets                    1058.65      0.73
 MSCI LatAm                               2901.68      0.95
 Brazil Bovespa                          97885.60      0.98
 Mexico IPC                              43738.66      0.37
 Chile IPSA                               5483.92      0.82
 Argentina MerVal                        36646.79      2.22
 Colombia IGBC                           12084.22      0.87
 Currencies                                         daily %
 Brazil real                               3.7460     -0.14
 Mexico peso                              19.1480      0.72
 Chile peso                                651.21      0.44
 Colombia peso                             3106.5      0.51
 Peru sol                                   3.306      0.21
 Argentina peso (interbank)               39.1700      0.92

 (Reporting by Aaron Saldanha in Bengaluru; editing by Bill
Nuestros Estándares:Los principios Thomson Reuters
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