EMERGING MARKETS-Latam stocks extend rally, data supports Bovespa

Fri Mar 28, 2014 3:55pm EDT

By Asher Levine
    SAO PAULO, March 28 (Reuters) - Latin American stocks
touched their highest level in nearly three months on Friday,
tracking a global rally in emerging market equities and better
than expected economic data from Brazil.
    The MSCI Latin American stock index rose for
the ninth session in ten, a day after it notched its biggest
one-day gain since July 2012. Currencies across the region were
mostly flat or stronger against the dollar.
    Figures from data services company EPRF showed the recent
rush of outflows from emerging market equity funds had all but
ceased globally as geopolitical tensions ease and risk appetite
rises. 
    That trend has been clear in Brazil, with the Bovespa
exchange posting a net 1.83 billion reais of inflows from
foreign investors in the month through Wednesday, driven by low
share prices and slight improvements in economic indicators.
    Data released earlier on Friday showed that Brazil avoided a
primary budget deficit in February, contrary to most market
expectations. The data helped push the benchmark Bovespa index
 past the 50,000 mark on Friday for the first time since
mid-January.
    "Our economic situation is not bad, but it's not good
either," said Alvaro Bandeira, a partner at Orama Investimentos
in Rio de Janeiro, citing Friday's budget numbers. "The market
had been so beaten down that we had a lot of room to rise."
    The Bovespa returned some of its gains later in the session,
however, as shares of state-controlled oil firm Petroleo
Brasileiro SA fell. Shares in the company, known as
Petrobras, soared in the previous session after a poll showed
declining approval for President Dilma Rousseff's
administration, which many investors blame for the company's
poor financial performance in recent years. 
 
    Other Latin American stock indexes posted modest gains, with
Mexico's IPC index and Chile's IPSA both up about
0.25 percent.
    In currency markets, Brazil's real weakened slightly
against the dollar after fluctuating back and forth into
negative territory earlier in the session. 
    "Now that worry over Brazil's rating downgrade and monetary
tapering in the United States has passed, there are far fewer
factors pushing the dollar higher (against the real)," said
Alfredo Barbutti, chief economist with BGC Liquidez in Sao
Paulo. "We'll have to wait and see if (Brazil's) central bank is
comfortable with that."
    Chile's peso strengthened 0.5 percent against the
dollar, driven by higher prices for copper, the country's main
export, while the Mexican peso was little-changed. 
    
    Key Latin American stock indexes and currencies at 1910 GMT:
    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            984.59      0.95     -2.73
                                                    
 MSCI LatAm                      3148.19      0.26      -1.9
                                                    
 Brazil Bovespa                 49686.82      0.08     -3.53
                                                    
 Mexico IPC                     40071.09       0.4     -6.22
                                                    
 Chile IPSA                      3747.13      0.13      1.30
                                                    
 Chile IGPA                     18444.89      0.02      1.20
                                                    
 Argentina MerVal                 6134.3     -0.92     13.79
                                                    
 Colombia IGBC                  13637.11      0.33      4.33
                                                    
 Peru IGRA                      14258.25      1.57     -9.49
                                                    
 Venezuela IBC                    2521.6     -2.02     -7.86
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2.2634      0.14      4.13
                                                    
 Mexico peso                     13.0832     -0.01     -0.41
                                                    
 Chile peso                          550      0.31     -4.35
                                                    
 Colombia peso                   1965.75     -0.07     -1.72
 Peru sol                          2.808      0.00     -0.53
                                                    
 Argentina peso (interbank)       8.0025      0.00    -18.87
                                                    
 Argentina peso (parallel)         10.81      0.56     -7.49
                                                    
 
    

 (Reporting by Asher Levine; editing by Andrew Hay)
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