October 9, 2019 / 8:07 PM / 4 days ago

EMERGING MARKETS-Brazilian stocks lead Latam shares higher amid trade optimism

 (New throughout, updates prices)
    By Susan Mathew
    Oct 9 (Reuters) - Latin American stocks tracked Wall Street
higher on Wednesday, with Brazilian shares up more than 1% on
heightened possibilities of a rate cut by the country's central
bank and on positive outlooks from some firms.
    MSCI's index of regional shares rose 0.8%,
with shares in Colombia also up 0.2%, while Mexican
shares were marginally higher. 
    Optimism stemmed from signs of easing hostility in the
U.S.-China trade war just a day before high-level trade talks
between the two sides are set to begin.
    Reports said China was still open to agreeing to a partial
trade deal with the United States, and that Beijing was offering
to increase its annual purchases of U.S. agricultural products. 
    Analysts, however, remained skeptical.
    "Even if a partial deal is reached later this week, this
will not change our view that the trade talks will eventually
break down as China appears unwilling to meet the U.S. core
demands," analysts at Capital Economics wrote in a note.
    Brazilian shares climbed 1.4%, posting their best
day in a month. Banco Santander Brasil rose 3.6%
after the lender said it expects to see its loan book grow by
more than 10% per year through 2022 and maintain its current
profitability ratio at 21%.
    Airline Gol gained after the carrier said it
expects core earnings margin to have been between 29% and 31% in
the third quarter.
    At the bottom of the index were shares of meat processor JBS
 after U.S. lawmakers sought to bring a probe into its
U.S. acquisitions. Food processor BRF slipped after
it confirmed its plant in Abu Dhabi was being audited and that
Saudi Arabia had restricted buying of some of its
products.
    Brazil's real currency fell as much as 0.4% before
steadying. Official data showed consumer price inflation missed
expectations and fell to its lowest in more than a year in
September, strengthening expectations of a third interest rate
cut this year.
    Capital Economics analysts now expect a 50-basis-point (bps)
cut in rates this month, as opposed to a previous forecast of a
cut of 25 bps. 
    Similar data out of Mexico, albeit in line with
expectations, also fuelled rate cut expectations by the
country's central bank.
    The Mexican peso was up 0.2% after two days of gains
against the dollar. As hopes of a more amicable trade deal
between Washington and Beijing rose, the dollar steadied against
a basket of six rivals, while it climbed against the
safe-heaven yen.
    Elsewhere in the emerging market universe, Turkey's lira 
 slid 0.5%, breaking through what traders called a key
support level of 5.85 against the dollar, after Turkey launched
a military operation targeting Kurdish fighters in northeast
Syrian.

    Key Latin American stock indexes and currencies at 1935 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets          993.80     -0.02
                                        
 MSCI LatAm                    2642.74       0.8
                                        
 Brazil Bovespa              101512.97      1.42
                                        
 Mexico IPC                   42543.84      0.02
                                        
 Chile IPSA                    5032.56     -0.17
                                        
 Argentina MerVal             30405.62      0.49
                                        
 Colombia IGBC                12935.41      0.24
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    4.0940     -0.07
                                        
 Mexico peso                   19.5690      0.29
                                        
 Chile peso                      723.5      0.18
                                        
 Colombia peso                  3464.3     -0.47
 Peru sol                        3.366      0.48
                                        
 Argentina peso                57.9800     -0.22
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru
Editing by Paul Simao)
  
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