RIO DE JANEIRO, April 7 Brazilian stocks and its
currency led gains on Latin American markets on Monday as
investors bet Brazil's next president will adopt more market
friendly policies after a weekend poll showed President Dilma
Rousseff has lost more support among voters.
Brazilians are increasingly pessimistic about the country's
economy and disappointed with Rousseff's performance, even as
she remains on track to win re-election on Oct. 5, the polling
firm Datafolha said on Saturday.
The numbers, which echoed the results of another survey
released two weeks ago, raised bets that whoever gets elected
will have to implement tough fiscal adjustments and other
market-friendly policies to fight inflation and encourage
investment in the country's dilapidated infrastructure.
Shares of state-run oil company Petroleo Brasileiro SA
, which is forced by the government to
import and sell fuel at a loss on the domestic market to curb
inflation, jumped more than 4 percent on hopes of a policy
The same survey showed that 78 percent of Brazilians believe
there is corruption in Petrobras, as the oil company is known.
"That puts pressure on the company to become more
transparent," said Paulo Gala, a strategist at Fator brokerage
in Sao Paulo.
He said foreign investors, who have lifted Brazil's
benchmark Bovespa index by more than 14 percent since a
March low, continued to buy Brazilian stocks.
The Bovespa index jumped 1.7 percent on Monday, driving the
MSCI stock index for Latin America 1.4 percent
Other regional stock indexes had a more modest performance.
Mexico's IPC index rose 0.45 percent, while Chile's IPSA
and IGPA indexes edged slightly higher.
The Brazilian real also strengthened more than its
Latin American peers, rising 0.7 percent to 2.2279 per dollar,
on track to close at its strongest level since late October.
It was also supported by a central bank decision to
roll-over currency swaps that expire early next month, while
still offering additional swaps on a daily basis. Swaps are
derivative contracts that offer investors protection against a
possible depreciation of the currency.
"If the central bank continues selling dollar (swaps) at
these levels, the market sees it as a sign that it is
comfortable with this new exchange rate and that encourages
market players to test new levels," said Reginaldo Gualhardo, a
currency trader at Treviso brokerage in Sao Paulo.
Key Latin American stock indexes and currencies at 1525 GMT:
Stock daily % YTD %
indexes Latest change change
MSCI Emerging 1003.66 0.16 -0.06
MSCI LatAm 3273.66 1.5 0.77
Brazil Bovespa 51932 1.66 0.82
Mexico IPC 40633.34 0.09 -4.90
Chile IPSA 3770.59 0.11 1.93
Chile IGPA 18544.46 0.09 1.74
Argentina MerVal 6433.45 0.72 19.34
Colombia IGBC 13952.61 -0.6 6.74
Peru IGRA 14303.87 0.03 -9.20
Venezuela IBC 2523.56 0 -7.78
Currencies daily % YTD %
Latest change change
Brazil real 2.2208 0.99 6.12
Mexico peso 13.012 -0.05 0.14
Chile peso 551.5 0.71 -4.61
Colombia peso 1934.04 0.83 -0.11
Peru sol 2.808 0.00 -0.53
Argentina peso 8.0000 0.03 -18.84
Argentina peso 10.54 0.57 -5.12
(Reporting by Priscila Jordao and Bruno Federowski; writing by
Walter Brandimarte; Editing by Peter Galloway)