(Repeats to fix garbled byline with no change to text) * Brazil stocks at highest level since March 5 * Peru's sol weakens on fears of political vacuum * Stronger oil prices boost Mexican, Colombian pesos By Shriya Ramakrishnan Nov 16 (Reuters) - Latin American stocks and currencies rose on Monday after positive results for a second COVID-19 vaccine lifted risk appetite, while political uncertainty limited gains in Peru's sol after its interim leader resigned over the weekend. Drugmaker Moderna Inc said its experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage clinical trial, making it the second U.S. drugmaker to report results that exceed expectations. The announcement sparked a rally across global markets on hopes for a swifter economic recovery from the pandemic. Brazil's real was the top performer in Latam, rising 1.2%, while Sao Paulo stocks jumped as much as 1.5% to a more than eight-month high. Risk sentiment was further boosted by a Brazilian central bank survey, which showed 2020 economic growth outlook improving slightly for Latin America's largest economy. Peru's sol weakened 0.3% and the country's sovereign dollar bonds turned lower, after lawmakers failed to name a successor to departed interim president Manuel Merino. The political upheaval adds to uncertainty facing Peru, the world's no. 2 copper producer, already battling the coronavirus pandemic and what is expected to be its worst economic contraction in a century. "The recent events just underline our view that the former market consensus of Peru as a stable country must be questioned," analysts at Credit Suisse said in a note. "We reiterate our opinion that Peru's sovereign debt ratings could be subject to a downgrade by all major rating agencies, as the economic underperformance has been stronger than expected and the political turmoil has persisted." Pfizer Inc's earlier vaccine update had also spurred optimism in the region last week, although most Latin American currencies ended the week lower as doubts about the availability and delivery of the vaccine crept in. "If last week was any guide, the positive sentiment might be short-lived. While unambiguously good news, we think markets are overestimating the timing and scalability of vaccine implementation," Mazen Issa, senior FX strategist at TD Securities cautioned in a note. Still, most emerging market currencies clocked gains during the day as increased risk appetite globally reduced the U.S. dollar's safe-haven appeal. Mexico's peso rose 0.6%, while Colombia's peso added about 0.2%, with both the currencies further supported by strength in oil prices. Local markets in Mexico and Colombia were shut for a holiday. A gauge of Latin American stocks jumped more than 2%, while stocks in Chile climbed to a more than three-month high. But Chile's peso came under pressure and was set for a third consecutive session of declines, weighed down by threats of strikes at some of its copper mines. Chile, the world's top copper producer, is highly susceptible to swings in prices of the commodity. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1204.65 1.37 MSCI LatAm 2127.00 2.2 Brazil Bovespa 105483.15 0.73 Chile IPSA 4067.42 1.55 Argentina MerVal - - Currencies Latest Daily % change Brazil real 5.4087 1.21 Mexico peso 20.2710 0.60 Chile peso 769.4 -0.39 Colombia peso 3634.11 0.19 Peru sol 3.6497 -0.25 Argentina peso (interbank) 79.9500 -0.25 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Edmund Blair and Bernadette Baum)
Our Standards: The Thomson Reuters Trust Principles.