December 19, 2017 / 2:34 PM / 3 months ago

EMERGING MARKETS-Brazil's Bovespa down amid continued fiscal fears

    SAO PAULO, Dec 19 (Reuters) - Brazil's Bovespa equities
index led losses among Latin American markets on Tuesday amid
ongoing concerns over the nation's fiscal health after a court
struck down a measure intended to control government spending.
    On Monday, Brazil's Supreme Court suspended the effects of a
decree by President Michel Temer, which would have put off
adjustments to the salaries of federal workers for a year. That
came as Brazil's Finance Minister Henrique Meirelles begins
talks with major ratings agencies in a bid to avoid a credit
downgrade, after lawmakers put off a vote on a key pension
reform until February.
    "Another blow to fiscal adjustment, given that the measure
should bring 4.4 billion reais ($1.34 billion) of savings next
year," analysts at local brokerage Coinvalores said of the
Supreme Court decision in a note to clients.
    Meirelles said in a radio interview on Monday that he will
tell major ratings agencies this week that delaying a vote on a
pension bill seen important to shoring up the nation's fiscal
accounts does not mean it will not be passed. However, key
lawmakers have warned that February is effectively the last
chance for the unpopular bill.
    Brazil's Bovespa had dropped 0.53 percent by midday.
    Chile's blue-chip IPSA index posted mild gains on
Tuesday, as markets continue to price in the unexpectedly
dominant win of investor favorite Sebastian Pinera in elections
over the weekend.
    "Despite the fact that Sebastian Pinera's coalition will not
have a majority in Congress, the change in government presents
an opportunity to improve business confidence and should foster
a continued macroeconomic rebound," Fitch said in a
    Lithium company SQM was the big gainer on the
IPSA, opening up over 6 percent on Tuesday, after it agreed with
state development agency Corfo to suspend an arbitration battle
for 30 days.
    ($1 = 3.29 reais)
Key Latin American stock indexes and currencies at 1419 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1134,98      0,41     31,09
 MSCI LatAm                      2769,53      -0,5     18,92
 Brazil Bovespa                 72730,78     -0,53     20,76
 Mexico S&P/BVM IPC                 0,00         0   -100,00
 Chile IPSA                      5598,59      0,05     34,86
 Chile IGPA                     28076,53      0,06     35,41
 Argentina MerVal               27137,32         0     60,41
 Colombia IGBC                  11099,57         0      9,59
 Venezuela IBC                   1291,05         0    -95,93
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      3,2866      0,30     -1,14
 Mexico peso                     19,1130     -0,16      8,53
 Chile peso                        621,3     -0,02      7,95
 Colombia peso                   2971,36      0,12      1,01
 Peru sol                          3,255      0,77      4,88
 Argentina peso (interbank)      17,4700      0,60     -9,13
 Argentina peso (parallel)          18,2     -0,60     -7,58

 (Reporting by Gram Slattery; Editing by Susan Thomas)
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