March 25, 2019 / 9:23 PM / 3 months ago

EMERGING MARKETS-Mexican peso and shares rise, Brazil's real jumps over 1 pct

 (Recasts throughout, updates prices)
    By Susan Mathew
    March 25 (Reuters) - Mexico's peso and stocks firmed on
Monday on positive economic activity data, while a weaker dollar
proved an additional boost to the currency ahead of a central
bank meeting later this week.
    Among other regional currencies, Brazil's real jumped
1.4 percent and posted its biggest one-day gain in nearly three
months, while most others weakened.
    Economic activity in Mexico expanded slightly in January
after shrinking the month before, data showed, exceeding analyst
expectations and tempering the risk of a contraction in the
first quarter.
    Mexico City's benchmark IPC stock index climbed
almost 1 percent, bucking a rout in global stocks spurred by
persistent fears of a slowdown in global growth. The peso
rose 0.4 percent after two days of losses.
    Several institutions had pared back expectations for Latin
America's second-biggest economy after a slowdown at the end of
last year. "Today's data reduces the possibility of a
contraction in the first quarter 2019," analysts at Banorte said
in a note.
    Investors will also be watching for Mexico's central bank
meeting on Thursday. The bank is expected to keep rates
unchanged, according to a Reuters poll, as inflationary
pressures subside and as the Federal Reserve takes a pause on
raising interest rates this year.  
    As the greenback ticked lower, Brazil's real rose and
added to its gains after an appeals court judge ordered that
former President Michel Temer be released from jail, following
his arrest last week on graft charges.
    The arrest had knocked local markets as it threatened to
divert attention from passing pension reforms seen as crucial to
the economy.
    Stocks in Sao Paulo closed marginally lower in a
volatile session, extending losses to a fifth straight session. 
    Over the weekend, speaker of the lower house Rodrigo Maia
urged President Jair Bolsonaro to lead the process for approval
of amendments to economic reforms in Congress. Bolsonaro said
approval of the reform was the Congress' responsibility. 
    The market should continue to decline, at least until a
common path is found, said Dan Kawa, chief investment officer at
Investimentos in a note.
    Chile's peso finished a tad weaker, tracking a fall 
in copper prices, while stocks in Santiago touched
a near three-month low during the session.
    Markets in Colombia were closed for a local holiday. 
    Key Latin American stock indexes and currencies at 2100 GMT:
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1047.71     -1.12
 MSCI LatAm                    2732.38      0.72
 Brazil Bovespa               93662.01     -0.08
 Mexico IPC                   42703.38      0.97
 Chile IPSA                    5193.52     -0.32
 Argentina MerVal             33166.32      1.03
       Currencies             Latest    Daily %
 Brazil real                    3.8535      1.36
 Mexico peso                   19.0213      0.34
 Chile peso                      679.8     -0.04
 Peru sol                        3.302     -0.09
 Argentina peso                42.0300     -0.48

($1 = 3.8521 reais)

 (Reporting by Susan Mathew in Bengaluru and José de Castro in
Sao Paulo;
Editing by Phil Berlowitz)
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