EMERGING MARKETS-Latin American markets rise on encouraging U.S. data

Thu Mar 13, 2014 11:08am EDT

By Walter Brandimarte
    RIO DE JANEIRO, March 13 (Reuters) - Latin American stocks
and currencies rose on Thursday as investors, still cautious
about an economic slowdown in China, focused on encouraging jobs
and retail sales figures in the United States.
    The Latin American portion of MSCI's benchmark stock index
 jumped as much as 1 percent in early trade after
data showed the number of Americans filing new claims for
unemployment benefits unexpectedly fell last week, while U.S.
retail sales rose more than expected in February. 
 
    Even as gains moderated later, it was the first rise of the
MSCI Latin America index after four consecutive sessions of
losses triggered by fears China's demand for the region's
commodities exports may further decline.
    "A better perception of the U.S. economy left investors less
averse to risk globally," said André Perfeito, chief economist
at Gradual Investimentos in São Paulo.
    Brazil's benchmark Bovespa index was little changed
from Wednesday's close, supported by shares of power utilities
such as Cia Energética de Minas Gerais SA, also known as Cemig
, which jumped more than 2 percent.
    Shares of Brazil's power sector companies rose on reports
the government will announce later on Thursday plans to refund
power distributors for sky-rocketing energy prices.
 
    Fears about China's economic slowdown still weighed on Latin
American markets, however, driving Mexico's IPC stock index
 0.4 percent lower. Such concerns were fueled by a string
of Chinese data that showed growth in investment, retail sales
and factory output all fell to multi-year lows. 
    In foreign exchange markets, most Latin American currencies
rose as the dollar weakened broadly against a basket of
currencies, reflecting a rebound in investors' appetite
for risk assets.
    The Brazilian real strengthened 0.3 percent to 2.351
per dollar after data showed Brazil retail sales rose
unexpectedly in January. The numbers reinforced expectations
that the central bank will keep raising interest rates to curb
inflation, adding to the allure of the currency. 
    Chile's peso rose 0.4 percent to 570.20 per dollar in
its second session of gains, partially recovering from a sharp
sell-off that had taken the currency to its weakest level in
nearly five years earlier this week.
    Still, analysts warned the peso was poised to weaken further
as Chile's central bank is expected to cut interest rates by 25
basis points later on Thursday. Chilean policymakers have
already reduced the country's base interest rate by 75 basis
points since October as the economy faltered.
    "The deterioration in economic activity trends along with
the rate-cutting cycle are two factors that are likely to
continue to weigh on the Chilean peso," ING strategists said in
a research note.
    
    Key Latin American stock indexes and currencies at 1455 GMT:
 Stock indexes                      daily %     YTD %
                         Latest     change      change
 MSCI Emerging         945.38       0.08        -5.79
 Markets                                        
 MSCI LatAm            2882.78      0.41        -10.3
                                                
 Brazil Bovespa        45821.45     -0.09       -11.04
                                                
 Mexico IPC            38494.79     -0.36       -9.91
                                                
 Chile IPSA            3626.83      0.1         -1.96
                                                
 Chile IGPA            17967.89     0.09        -1.42
                                                
 Argentina MerVal      5731.52      0.31        6.32
                                                
 Colombia IGBC         12981.92     0.76        -0.68
                                                
 Peru IGRA             15183.84     0.19        -3.62
                                                
 Venezuela IBC         2650.37      0           -3.15
                                                
                                                
 Currencies                         daily %     YTD %
                                    change      change
                       Latest                   
 Brazil real           2.3510       0.31        0.25
                                                
 Mexico peso           13.204       0.28        -1.32
                                                
 Chile peso            570.2        0.35        -7.73
                                                
 Colombia peso         2042.39      0.19        -5.40
                                                
 Peru sol              2.805        -0.14       -0.43
                                                
 Argentina peso        7.8850       -0.10       -17.66

 Argentina peso        10.9         -0.28       -8.26

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    GRAPHIC on emerging market FX performance 2014:GRAPHIC on MSCI emerging index performance 2014:-------------------------------------------------------------->