EMERGING MARKETS-Latam stocks, FX rise after U.S., Colombia data

Thu Mar 20, 2014 5:06pm EDT

(Adds closing prices, Argentina data, economic analyst's quote)
    By Asher Levine
    SAO PAULO, March 20 (Reuters) - Latin American currencies
closed higher on Thursday while stock markets advanced with
encouraging economic data in the United States and Colombia
offsetting concerns over a sooner-than-expected increase in U.S.
interest rates.
    The region's currencies sank late on Wednesday after U.S.
Federal Reserve chief Janet Yellen suggested the central bank
could increase interest rates "around six months" after it
finishes unwinding its monetary stimulus program, a shorter time
frame than many market participants had anticipated.
    Nearly every currency across Latin America strengthened
against the dollar on Thursday, however, after the Philadelphia
Federal Reserve Bank said its business activity index rose far
more than expected in March. Traders said the data helped feed
risk appetite among global investors.
    Colombia's peso gained 0.87 percent after data showed
the country's economy grew 4.3 percent in 2013, beating market
expectations.
    "After a sustained depreciation for most of the year, the
peso seems to be on the comeback trail, driven by sustained
macroeconomic stability, reduced electoral worries and deepening
rate hike expectations," Oxford Economics analyst Aryam Vasquez
wrote on Thursday. 
    Brazil's real advanced about 1 percent, while
Mexico's peso bounced back after posting its biggest
one-day loss in six weeks in the previous session.
    Mexican Finance Minister Luis Videgaray said on Thursday
Mexico is well positioned to face market volatility and is
working to maintain its flexible credit line with the
International Monetary Fund.
    Argentina's official peso rate was unchanged, while
the black market rate weakened 0.2 percent against the
dollar. Government data on Thursday showed the country's trade
surplus totaled $44 million in February, far short of the $363
million surplus forecast in a Reuters poll. 
    
    STOCKS RALLY
    Local stocks mostly gained, with the MSCI Latin American
stock index rallying for the fourth straight
session and closing at a nearly two-week high.
    Brazil's Bovespa also advanced for a fourth day,
closing 1.53 percent higher and putting it back into slightly
positive territory for the month. The index has not seen a
monthly gain since October as jitters over a weakening economy
and an upcoming presidential election led investors to look for
opportunities elsewhere.
    State-controlled companies such as oil producer Petroleo
Brasileiro SA, electric utility Eletrobras 
and lender Banco do Brasil continued to post strong
gains, with traders expecting an upcoming poll to show
opposition candidates gaining on President Dilma Rousseff. 
    Many investors have been critical of the Rousseff
administration for heavy-handed government intervention in the
private sector and policies that run against the interests of
minority shareholders in state-controlled firms.
    Private-sector banks such as Banco Bradesco SA 
and Itau Unibanco Holdings SA also advanced.
Liquidity risks to Brazil's lenders should remain stable in the
first half of 2014, central bank director Anthero Meirelles said
on Thursday. 
    Despite its mediocre performance over the past 12 months,
the Bovespa is likely to move higher this year amid a global
economic recovery, a Reuters poll showed, while Mexican shares
will likely gain on the back of market reforms. 
    Mexico's IPC index rose 2.07 percent to finish
trading at 39,616 points, a level it has not closed above since
late February. Gains were driven by a 4.6 percent jump in
bottling firm Femsa and a 1.6 percent rise in
telecommunications firm America Movil.
    Chile's IPSA index closed higher for the third
session in four, led by a 1.9 percent rise in shares of lender
Santander Chile.

Latin American stock indexes and currencies at 2044 GMT:
     Stock indexes                   daily %   YTD %
                      Latest         change    change
 MSCI Emerging        940.7          -1.04     -6.18
 Markets                                       
 MSCI LatAm           2967.38        1.32      -7.29
                                               
 Brazil Bovespa       47278.48       1.53      -8.21
                                               
 Mexico IPC           39616.19       2.07      -7.28
                                               
 Chile IPSA           3656.05        0.47      -1.17
                                               
 Chile IGPA           18091.78       0.44      -0.74
                                               
 Argentina MerVal     5965.11        1.67      10.65
                                               
 Colombia IGBC        13119.78       0.7       0.37
                                               
 Peru IGRA            14454.23       -0.01     -8.25
                                               
 Venezuela IBC        2488.61        -3.85     -9.06
                                               
                                               
 Currencies                          daily %   YTD %
                             Latest  change    change
 Brazil real          2.3249         0.96      1.22
                                               
 Mexico peso          13.2505        0.26      -1.66
                                               
 Chile peso           566            0.44      -7.05
                                               
 Colombia peso        1992           0.87      -3.01
                                               
 Peru sol             2.815          -0.07     -0.78
                                               
 Argentina peso       7.9625         -0.13     -18.46
 (interbank)                                   
                                               
 Argentina peso       10.9           0.18      -8.26
 (parallel)                                    
                                               
 
 

 (Editing by Meredith Mazzilli and Grant McCool)
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