December 4, 2019 / 8:15 PM / 7 months ago

EMERGING MARKETS-Renewed trade hopes lift Latam stocks, Chile rate decision eyed

 (Updates prices)
    * U.S. and China move closer to phase-one trade deal -
    * Brazil shares at record high
    * Fitch says technical recession likely in Chile 
    * Argentine central bank chief tenders resignation

    By Ambar Warrick and Susan Mathew
    Dec 4 (Reuters) - Most Latin American stock markets staged a
strong comeback on Wednesday, with Brazil shares scaling an
all-time high, as U.S. President Donald Trump voiced more
optimism than he did a day earlier about trade talks with China.
    After flagging a possible delay in reaching a deal with
China on Tuesday, Trump earlier in the day said trade talks were
going "very well." This followed a Bloomberg report that said
both sides were closer to agreeing on the amount of tariffs that
would be rolled back in a phase one trade deal. 
    A basket of Latin American stocks jumped
1.3%, in line with a world-wide pick up in stocks. Brazil shares
 rose 1% with financials and energy stocks in the lead.
    Data showing Brazilian industrial production kept up its
recovery in October came hot on the heels of strong third
quarter economic growth numbers on Tuesday, brightening the
picture for Latin America's largest economy. 
    Data also showed overall business activity in Brazil
remained unchanged in November from the prior month. The real
currency firmed 0.1% against a slightly weaker dollar.

    Chile markets were among the strongest performers in the
region, with stocks up 3.4%, while the currency
gained 2%. All eyes are on a central bank meeting later in the
day and while consensus expectations are for a cut, analysts say
it could be a close call.
    "We've penciled in a cut, but are less confident about (a
cut) than were a few days ago," said William Jackson, chief
emerging markets economist at Capital Economics. 
    "The pace of the fall in the peso over the past few days
started to worry policymakers ... We saw the start of the quite
large intervention program, which suggested they thought the
currency may have overshot it, and they're trying to push back
against that."
    Weeks of often violent protests in Chile over economic
inequality had hammered its markets of late. 
    Rating agency Fitch on Wednesday said the impact of protests
may push the Chilean economy into a technical recession,
expecting a contraction in the current quarter and the next.
    In Argentina, stocks spiked 5.5%, while peso
closed down, before central bank chief Guido Sandleris presented
his resignation, saying economic situation was, without a doubt
worse, than expected.
    Oil exporters Mexico and Colombia's rose 0.6%
and 1% respectively, tracking a surge in crude prices. 
    Latin American stock indexes and currencies at 1939 GMT:
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1037.38     -0.27
 MSCI LatAm                    2665.52      1.28
 Brazil Bovespa              110070.89      1.02
 Mexico IPC                   42300.05      0.01
 Chile IPSA                    4644.98      3.38
 Argentina MerVal             34576.71     5.556
 Colombia COLCAP               1599.81      0.62
       Currencies             Latest    Daily %
 Brazil real                    4.2021      0.07
 Mexico peso                   19.4370      0.57
 Chile peso                      787.8      2.09
 Colombia peso                  3467.5      0.94
 Peru sol                        3.379      0.30
 Argentina peso                59.8800      0.07

 (Reporting by Susan Mathew in Bengaluru; editing by Grant
Nuestros Estándares:Los principios Thomson Reuters
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