SAO PAULO Aug 29 Brazil's benchmark stock index
rose on Friday after data showed the country entered a recession
in the first half of the year, boosting expectations that
President Dilma Rousseff will lose her bid for re-election in
Brazil's Bovespa stock index nearly made up for the
previous session's loss and remained on track to close August
with its biggest monthly gain since Jan. 2012.
Much of the market's gains have come on the heels of poll
data showing declining support for Rousseff, who many investors
blame for mismanaging Brazil's economy and state-run
Data on Friday showed Brazil's economy shrank over the first
two quarters of the year, entering into a technical recession.
"Investors are pricing that Dilma can lose votes with the
poor performance from the economy," wrote Itau BBA analysts in a
client note on Friday.
The broader MSCI Latin American stock index
rose to its highest level in over a year, with the Mexican and
Chilean benchmark stock indexes posting modest
In currency markets, the Brazilian real was
little-changed against the U.S. dollar. The real has tended to
appreciate on negative poll data for Rousseff, as investors
expect the country's risk premium to decline under a new
Chile's peso strengthened sharply, adding about 1.25
percent against the dollar, with traders citing bargain-hunting
after the currency hit its weakest level in over five years in
the previous session. The peso has been weighed down by a
decline in the price for copper, the country's main export.
Copper prices were on track for their biggest
monthly loss since March on worries that rising tensions in
Ukraine could set back global growth and hit metals demand.
Peru's nuevo sol was little-changed after the finance
ministry widened its view of the 2014 trade deficit on Friday to
more than double its last forecast.
(Reporting by Asher Levine in Sao Paulo and Froilan Romero in
Santiago; Editing by Chizu Nomiyama)