October 2, 2018 / 8:41 PM / 2 months ago

EMERGING MARKETS-Brazil, Argentina help LatAm buck emerging markets gloom

    By Susan Mathew
    Oct 2 (Reuters) - Brazil's real hit a seven-week high on
Tuesday, and the country's stock market jumped the most in
nearly two years after a poll showed the market-preferred
presidential candidate had clawed back ground, while the
Argentine peso strengthened for a second straight day on more
note sales.
    The MSCI Latin American currency and stock
 indexes both gained, in sharp contrast with
gloom in other emerging markets due to the dollar's gains, weak
factory data in China and anti-euro comments by an Italian
lawmaker.
    Brazil's real hit a high of 3.9048 against the dollar
before easing slightly. The benchmark stock index rose
3.9 percent to hover near two-month highs, led by financial and
energy companies.
    The jump came after the latest presidential election poll
showed front-runner and market-preferred conservative candidate
Jair Bolsonaro regaining lost ground against leftist rival
Fernando Haddad.
    Bolsonaro would likely win the first round vote this
weekend, and tie with Haddad in a likely second round run-off,
the poll showed. An earlier poll has predicted a second-round
loss.
    "Apparently the tide seems to have started to turn for
Bolsonaro," Guide brokerage said in a research note. "Many were
starting to forecast that Bolsonaro wasn't going to improve in
the polls ... but yesterday's numbers showed a turnaround."
    Among stocks, oil company Petrobras jumped 8.3
percent. Banco Bradesco added 6.1 percent after the
country's second-biggest lender announced plans to enter the
active loan portfolio market with the acquisition of 65 percent
of RCB Investments.
    The Argentine peso closed 3.6 percent higher at 38 to
the dollar, bringing its gains in the past two days to 7.8
percent.
    The central bank sold 58.82 billion pesos ($1.40 billion) of
seven-day 'Leliq' notes on Tuesday, with a interest rate of
69.465 percent. That followed a note sale worth 71.1 billion
pesos on Monday.
    The bank says it plans to offer Leliqs regularly to sop up
excess liquidity to prevent nervous investors from buying
dollars, as the country battles inflation expected to exceed 40
percent this year.
    The Merval stock index broke a four-day losing
streak, helped by a 3.9 percent rise in financial conglomerate
Grupo Financiero Galicia.
    The Mexican peso fell against the dollar as investors
cautiously awaited details of the new United
States-Mexico-Canada deal struck over the weekend.
    Mexico's central bank is to hold its October meeting on
Thursday and is seen keeping its benchmark interest rate steady
at 7.75 percent as inflation slows.
    
    Key Latin American stock indexes and currencies at 2007 GMT:
 Stock indexes                                                    daily %  YTD % change
                                         Latest                    change  
 MSCI Emerging Markets                             1033.53          -1.23         -9.67
 MSCI LatAm                                        2637.35           2.85         -9.33
 Brazil Bovespa                                   81672.72           3.88          6.90
 Mexico IPC                                       49334.63          -1.02         -0.04
 Chile IPSA                                        5323.49           0.47          0.47
 Argentina MerVal                                 32715.65            0.4          8.81
 Colombia IGBC                                    12515.71          -0.33         10.07
                                                                                       
 Currencies                                                       daily %  YTD % change
                                                    Latest         change  
 Brazil real                                        3.9299           0.10        -15.69
 Mexico peso                                       18.7990          -0.49          4.79
 Chile peso                                          658.4          -0.06         -6.64
 Colombia peso                                      3016.8          -0.66         -1.15
 Peru sol                                            3.312          -0.15         -2.26
 Argentina peso (interbank)                        38.0000           4.08        -51.05
                                                                           
 Argentina peso (parallel)                              38           1.32        -49.39
                                                                           
 

 (Reporting by Susan Mathew in Bengaluru; Editing by Meredith
Mazzilli)
  
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