June 12, 2019 / 8:17 PM / 6 days ago

EMERGING MARKETS-Argentine assets rally on Macri's running mate pick

 (Recasts throughout; updates prices, adds quote)
    By Sruthi Shankar
    June 12 (Reuters) - Argentine stocks surged to all-time
highs on Wednesday and the peso firmed over 2% as investors
cheered President Mauricio Macri's choice of a moderate running
mate that could broaden his voter base in the elections to be
held later this year.
    Buenos Aires' main Merval stock index jumped 6%,
rising across the board, while the peso climbed to over a
one-month high against the dollar and over-the-counter bonds
 gained.
    In a series of tweets, Macri, a center-right former
businessman whose popularity has been hit by a flagging economy
and high inflation, said moderate Argentine Senator Miguel
Pichetto will run as his vice-presidential candidate.

    "While the presidential race is likely to remain tight in
the months to come, Pichetto's nomination improves the chances
of policy continuity," Morgan Stanley analysts wrote in a client
note. "Overall, we expect local assets to remain stable in the
near term, as the recent sell-off in rates should help carry to
stay supported."
    Argentine markets were a bright spot in Latin America, with
a broadly firming U.S. dollar adding pressure on the Mexican
peso, which gave back some gains made on Washington's
decision to hold off tariffs on Mexican goods.
    The MSCI index of Latin American currencies
has gained nearly 2% so far in June, with the dollar dented by
hopes that the Federal Reserve will cut interest rates to spur
global economic growth in the wake of the trade war with China.
    However, the greenback on Wednesday held steady after U.S.
President Donald Trump expressed optimism over making a trade
deal with China, although he said he would hold up a deal unless
China agreed to four or five major points.

    Heading into the G20 summit to be held at the end of this
month, some profit-taking among emerging markets currencies
could be expected, analysts at Citigroup said a note.
    Trump has said he is ready to impose another round of
tariffs on Chinese goods if no progress is made in talks with
Chinese President Xi Jinping at the summit. 
    Colombia's peso fell 0.26%, its first decline in five
days, hit by a slump in oil prices. Chile's peso
also ticked lower as prices of copper, the country's main
export, fell.
    Among stocks, Brazil's Bovespa fell nearly 1% after
hitting 12-week highs in early trade as iron ore and oil majors
were hit by falling prices of crude and iron ore, which is used
to make steel.
    Shares in state-run oil company Petroleo Brasileiro SA
 fell over 1%, while steelmaker Companhia
Siderurgica Nacional tumbled nearly 6% after Morgan
Stanley downgraded the stock to "equal-weight" from
"overweight." 
    
    Key Latin American stock indexes and currencies at 1948 GMT:
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1024.25    -0.74
                                     
 MSCI LatAm                 2772.44    -0.68
                                     
 Brazil Bovespa            97997.50    -0.97
                                     
 Mexico IPC                43798.40     0.19
                                     
 Chile IPSA                 5057.11    -0.24
                                     
 Argentina MerVal          40630.52     5.96
                                     
 Colombia IGBC             12234.92    -0.71
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                 3.8678    -0.50
                                     
 Mexico peso                19.2198    -0.49
                                     
 Chile peso                   695.4    -0.39
                                     
 Colombia peso              3265.63    -0.33
                                     
 Peru sol                     3.329    -0.09
                                     
 Argentina peso             43.6500     2.43
 (interbank)                         
                                     
 
    

 (Reporting by Susan Mathew in Bengaluru;
Editing by Susan Thomas and Leslie Adler)
  
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