April 3, 2019 / 3:21 PM / 3 months ago

EMERGING MARKETS-Latam stocks, FX join global rally on trade hopes, strong data

    By Susan Mathew
    April 3 (Reuters) - Latin American stocks and currencies
rallied on Wednesday on continued signs of progress in
U.S.-China trade talks and reduced fears of slower global growth
as China reported positive economic data.
    Comments from White House economic adviser Larry Kudlow on
Tuesday that the United States and China "expect to make more
headway" in trade talks this week, and a survey showing activity
in China's services sector picked up to a 14-month high in
March, boosted buying.
    Among regional currencies, Brazil's real firmed 0.4
percent to its highest in a week and a half against a weaker
dollar, while Mexico's peso rose 0.2 although tensions at
its border with United States kept gains in check.
    U.S. President Donald Trump took a step back on Tuesday from
his threat to close the U.S. southern border to fight illegal
immigration, but he demanded on Wednesday that Mexico take
immediate steps to deal with immigration to avert the
closure.
    But Morgan Stanley said its analysts "believe that investors
would be more comfortable owning risk in Mexico."
    "Markets are pricing in risks much better and the country is
likely to avoid any short-term reaction from rating agencies, as
budget numbers keep surprising to the upside, while the monetary
policy stance remains one of the tightest across EM."
    In Brazil, investors will be watching Economy Minister Paulo
Guedes' appearance at a Commission of Constitution and Justice
hearing, the first congressional body to review the government's
signature pension reform proposal.
    Guedes had skipped a CCJ hearing last week, sending negative
signals on the progress of passing the reforms and sent local
financial markets tumbling.  
     Also helping sentiment was a report by IHS Markit Insight
showing growth in Brazilian economic activity picked up to its
strongest in over a year in March.
    Stocks in Sao Paulo rose 0.8 percent on broad-based
gains, while most other bourses across Latam rose, in line with
a rally in world stocks.
    Mexican shares climbed 0.7 percent, while those in
Colombia rose after two days of declines.
    Chile's peso jumped more than 1 percent, with rising
prices of the country's main export, copper, providing a  boost.
Stocks in Santiago climbed 0.2 percent.

    Key Latin American stock indexes and currencies at 1418 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1081.45      0.96
                                        
 MSCI LatAm                    2797.41      1.38
                                        
 Brazil Bovespa               96172.53      0.82
                                        
 Mexico IPC                   43611.18      0.66
                                        
 Chile IPSA                    5216.60      0.15
                                        
 Argentina MerVal             32620.78     -1.17
                                        
 Colombia IGBC                13083.40      0.49
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8397      0.40
                                        
 Mexico peso                   19.1920      0.18
                                        
 Chile peso                      666.6      0.98
                                        
 Colombia peso                 3127.49      0.53
 Peru sol                        3.301      0.27
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 

 (Reporting by Susan Mathew in Bengaluru;)
  
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