EMERGING MARKETS-Latam currencies, stocks rise on U.S. payrolls report

Thu Jul 3, 2014 12:56pm EDT

By Asher Levine
    SAO PAULO, July 3 (Reuters) - Latin American markets rose on
Thursday, tracking U.S. exchanges higher after a
better-than-expected U.S. payrolls report upped expectations for
global economic growth and fed risk appetite. 
    The MSCI Latin American stock index was set
to post its biggest gain in two weeks, while nearly every
currency in the region strengthened against the dollar.
    Data on Thursday showed U.S. employment growth jumped in
June while the jobless rate closed in on a six-year low, helping
lead a rally in U.S. equities markets. 
    "The fact the economy is growing should be good for equities
and since the market believes the Fed will not prick bubbles
soon, let's enjoy the ride," said Pedro Tuesta, an economist
with 4Cast in Washington, D.C. "With higher equities and lower
risk aversion, (investors) buy high yield."
    Higher risk assets such as Latin American stocks rose, with
Mexico's IPC stock index touching its highest level in
over a year.
    Brazil's Bovespa stock index added the most in over
two weeks, driven by shares of mining firm Vale SA.
The stock tends to track the outlook for global growth and
attracts a large share of foreign investors due to its high
liquidity.
    Shares of state-run oil firm Petroleo Brasileiro SA
 fell slightly after an electoral poll showed mounting
support for President Dilma Rousseff, whose policies many
investors see as hostile to minority shareholder interests.
    The region's currencies erased early losses to trade higher
as initial concern over the impact of stronger U.S. economic
numbers on the outlook for higher U.S. interest rates faded.
    "It seems the strong U.S. dollar theme needs all the help it
can possibly get," wrote Citi strategist Dirk Willer in a client
note. "Just strong U.S. data is not enough. There needs to be a
local issue as well weakening the currency."
    Brazil's real made up for the previous day's losses,
while Chile's peso was further boosted by higher prices
for copper, the country's main export.
    Colombia's peso extended a recent rally and reached
its strongest level in over a year, boosted by
higher-than-average inflows, according to Citi analysts.
    
    Key Latin American stock indexes and currencies at 1644 GMT:

 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1062.35      0.17      5.77
                                                    
 MSCI LatAm                      3399.01      0.82      5.33
                                                    
 Brazil Bovespa                 53525.81      0.94      3.92
                                                    
 Mexico IPC                     43644.18      0.84      2.15
                                                    
 Chile IPSA                      3897.19      0.24      5.35
                                                    
 Chile IGPA                     18968.35      0.14      4.07
                                                    
 Argentina MerVal               8196.729       0.5     52.04
                                                    
 Colombia IGBC                  14118.67     -0.03      8.01
                                                    
 Peru IGRA                      16840.73      0.44      6.90
                                                    
 Venezuela IBC                   2131.14      0.26    -22.12
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2.2148      0.39      6.41
                                                    
 Mexico peso                     12.9707      0.20      0.46
                                                    
 Chile peso                          549      0.49     -4.17
                                                    
 Colombia peso                   1840.74      0.89      4.96
 Peru sol                          2.782      0.32      0.40
                                                    
 Argentina peso (interbank)       8.1375      0.00    -20.22
                                                    
 Argentina peso (parallel)            12      0.42    -16.67
                                                    
 

 (Reporting by Asher Levine; editing by Andrew Hay)
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