EMERGING MARKETS-Commodities shares, foreign investors boost Brazil's Bovespa

Wed May 14, 2014 12:44pm EDT

SAO PAULO, May 14 (Reuters) - Latin American stocks were
mixed on Wednesday in the absence of major market drivers,
though widely traded commodities shares favored by foreign
investors helped Brazil's Bovespa index advance slightly.
    The MSCI Latin American stock index rose for
the third straight day, adding 1 percent. 
    Brazil's Bovespa erased the previous session's
losses, rising 0.67 percent to 54,271 points. The index was
bolstered by shares of iron-ore mining company Vale SA
 and state-run oil company Petroleo Brasileiro SA
, both of which tend to be favored by foreigners due
to their high liquidity.
    "The market is (between) resistance levels of 54,000 and
55,000 points," said Joao Pedro Brugger, an analyst at Leme
Investimentos in Florianopolis, Brazil. "But the market is more
optimistic, and we've seen foreign investors coming in."
    Brazilian equities have seen net foreign inflows of 7.5
billion reais ($3.4 billion) in the year through May 12, spurred
by low share prices and rising expectations that Brazilian
President Dilma Rousseff could lose her re-election bid in
October.
    Rousseff's administration has been criticized heavily as
being hostile to investor interests, especially in relation to
state-run companies.
    "We suspect that if polls continue to show a decline in
(Rousseff's) popularity, inflows into Brazil's equity and debt
markets will increase," Brown Brothers Harriman analysts led by
Marc Chandler wrote on Wednesday. "Even though this is not our
base case, the chances of a new government now seem far larger
than what it was just a month ago." 
    The Brazilian real strengthened 0.4 percent to 2.20
per dollar.
    Traders have pointed to what they see as an informal trading
band between 2.2 and 2.25 reais being defended by the central
bank through currency interventions.
    Elsewhere in Latin America, Mexico's IPC stock index 
edged lower, while Chile's IPSA stock index was nearly
flat.
    The Mexican peso traded slightly stronger against the
dollar, while Colombia's peso ended a three-day slide.
    "With further tightening likely and global investors
searching for yield, Colombia will remain an attractive
destination for inflows," Brown Brothers Harriman wrote.
    
    Key Latin American stock indexes and currencies at 1618 GMT:
    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1033.05      1.04      1.97
                                                    
 MSCI LatAm                      3410.83      0.54      5.99
                                                    
 Brazil Bovespa                 54271.22      0.67      5.37
                                                    
 Mexico IPC                     42150.01     -0.21     -1.35
                                                    
 Chile IPSA                      3953.16     -0.08      6.87
                                                    
 Chile IGPA                     19327.88     -0.07      6.04
                                                    
 Argentina MerVal                6912.99      0.67     28.23
                                                    
 Colombia IGBC                   13705.2      0.11      4.85
                                                    
 Peru IGRA                       15810.1     -0.04      0.36
                                                    
 Venezuela IBC                   2178.42      0.11    -20.40
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2.2053      0.41      6.87
                                                    
 Mexico peso                     12.8788      0.20      1.17
                                                    
 Chile peso                        549.5     -0.16     -4.26
                                                    
 Colombia peso                   1926.14     -0.15      0.30
 Peru sol                          2.783     -0.04      0.36
                                                    
 Argentina peso (interbank)       8.0300     -0.09    -19.15
                                                    
 Argentina peso (parallel)         10.71      0.93     -6.63
                                                    
 
 (Reporting by Asher Levine and Priscila Jordao; Editing by
Peter Galloway)
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