EMERGING MARKETS-Latam stocks, currencies rise following ECB rate cut
SAO PAULO, June 5 (Reuters) - Latin American stocks and currencies gained on Thursday after the European Central Bank unleashed measures to support the euro zone economy, boosting the outlook for global liquidity and feeding risk appetite. Nearly every currency in the region strengthened modestly, with the MSCI Latin American stock index posting its biggest one-day gain in two weeks. The ECB cut all its main interest rates to record lows on Thursday while imposing negative interest rates on its overnight depositors and offering banks new long-term funds. "This increases global liquidity, which affects emerging markets," said Gustavo Mendonça, an economist with Saga Capital in Rio de Janeiro. "Even more so for stock markets like ours which are...far from their historic highs." Brazil's Bovespa stock index rose almost 0.4 percent, nearly erasing the previous session's loss. The biggest gainer was retailer GPA SA, which rose 2.7 percent. The company's board, along with other subsidiaries of its parent company, French retailer Casino , approved a plan to merge their e-commerce units on Wednesday. Mexico's IPC stock index rose for the third session in four, boosted by encouraging consumer confidence data. Currencies across the region posted modest gains against the dollar as traders upped bets that the ECB's policy moves would help spur bigger inflows. Yields on Brazilian interest rate futures <0#DIJ:> dropped across the maturity curve after Brazil's central bank signaled it is likely to keep interest rates stable for some time despite inflation pressure, according to minutes released on Thursday from its latest policy-setting meeting. "If there is any move in the target (interest) rate, it is likely to be a southbound shift," Espirito Santo Investment Bank analyst Jankiel Santos wrote in a client note. "However, given that the government's inflation forecasts still point towards higher-than-targeted results, we think (monetary policy committee) members are likely to keep the Selic target rate at 11 percent for a while." Key Latin American stock indexes and currencies at 1535 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1036.35 0.5 2.84 MSCI LatAm 3267.23 0.82 1.24 Brazil Bovespa 52018.15 0.36 0.99 Mexico IPC 42117.51 0.39 -1.43 Chile IPSA 3929.7 0.33 6.23 Chile IGPA 19173.19 0.28 5.19 Argentina MerVal 7792.61 1.26 44.55 Colombia IGBC 13820.55 0.29 5.73 Peru IGRA 15735.54 0.43 -0.11 Venezuela IBC 2203.41 0 -19.48 Currencies daily % YTD % change change Latest Brazil real 2.2712 0.52 3.77 Mexico peso 12.8837 0.29 1.14 Chile peso 551 0.36 -4.52 Colombia peso 1892.4 0.31 2.09 Peru sol 2.784 0.18 0.32 Argentina peso (interbank) 8.1100 -0.03 -19.94 Argentina peso (parallel) 11.57 0.61 -13.57 (Reporting by Priscila Jordao and Asher Levine Editing by W Simon)
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