EMERGING MARKETS-Latam stock markets rally after Crimea vote

Mon Mar 17, 2014 3:18pm EDT

By Asher Levine
    SAO PAULO, March 17 (Reuters) - Latin American stock markets
tracked global equities markets higher on Monday as investors
awaited the next steps in the standoff between Western powers
and Russia over the future of Crimea.
    The MSCI Latin American stock index rose for
the first session in four, adding 0.9 percent while the broader
MSCI index for emerging markets gained 0.6 percent.
    Bourses in Brazil, Chile and Mexico had fallen in recent
days as investors feared tensions centered around Sunday's
referendum over the Crimea region's political allegiance would
stoke violence and economic turbulence.
    While the referendum for Crimea to become part of Russia was
held without major violence, it remains to be seen whether the
European Union and the United States will escalate economic
sanctions far enough to weaken Russia, which could retaliate by
cutting its energy exports to the West. 
    "It seems as if markets had already anticipated these
developments," said Luciano Rostagno, chief strategist with
Banco Mizuho in Sao Paulo. "The market is on hold, waiting to
see what Putin will say and what the West's reaction will be."
   On Wall Street, U.S. stocks rose more than 1 percent on
Monday while European stocks closed higher. In Russia, where
equities had fallen last week to 4-1/2-year lows as investors
anticipated sanctions, a benchmark stock index closed 3.7
percent higher. 
    Brazil's benchmark Bovespa stock index bounced off
more than eight-month lows hit on Friday, led mostly by bank
shares. 
    Chile's IPSA index gained slightly, led by a 2.8
percent rise in shares of LATAM Airlines Group SA,
Latin America's largest air carrier. 
    Mexico's stock market was closed for a local holiday.
    Brazil's real was mostly unchanged from Friday's
close, while the Colombian and Mexican pesos  both
strengthened slightly. Chile's peso gained 0.35 percent
against the dollar, boosted by a rise in the price for copper
, Chile's main export.
    Yields paid on longer-dated contracts of Brazilian interest
rate futures ticked higher after a weekly central bank
poll showed economists raised their forecasts for year-end
inflation to 6.11 percent from 6.01 percent a week earlier.
    "In the short term there is a worse outlook on inflation and
some in the market have been skeptical about the government's
finances," said Alfredo Barbutti, chief economist with BGC
Liquidez in Sao Paulo.
    Brazil's social security deficit this year was
underestimated by about 10 billion reais ($4.3 billion) by the
government, Social Security Minister Garibaldi Alves told local
newspaper Valor Economico on Monday, raising questions about the
country's ability to meet its fiscal savings target this year.
 
   
    Key Latin American stock indexes and currencies at 1900 GMT:

     Stock indexes                 daily %    YTD %
                          Latest   change     change
 MSCI Emerging         943.42      0.61       -6.48
 Markets                                      
 MSCI LatAm            2853.95     0.81       -11.56
                                              
 Brazil Bovespa        45164.63    0.44       -12.31
                                              
 Chile IPSA            3623.47     0.33       -2.05
                                              
 Chile IGPA            17942       0.29       -1.56
                                              
 Argentina MerVal      5746.27     -0.01      6.59
                                              
 Colombia IGBC         13020.81    0.24       -0.39
                                              
 Peru IGRA             14749.07    -0.38      -6.38
                                              
 Venezuela IBC         2580.6      -2.16      -5.70
                                              
                                              
 Currencies                        daily %    YTD %
                                   change     change
                       Latest                 
 Brazil real           2.3487      0.08       0.34
                                              
 Mexico peso           13.1635     0.35       -1.01
                                              
 Chile peso            570.3       0.21       -7.75
                                              
 Colombia peso         2034.75     0.35       -5.05
                                              
 Peru sol              2.809       -0.21      -0.57
                                              
 Argentina peso        7.9225      -0.28      -18.05

 Argentina peso        10.85       0.92       -7.83
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