December 18, 2017 / 2:58 PM / a year ago

EMERGING MARKETS-Chilean markets rally as Pinera wins presidency

    By Bruno Federowski
    SAO PAULO, Dec 18 (Reuters) - Chilean stocks hit a record
high on Monday and the peso soared after conservative Sebastian
Pinera won a presidential election by a wider-than-forecast
margin, fueling expectations of further business-friendly
    An investor favorite in the $250 billion economy, Pinera's
proposals are seen as pro-mining in the world's top copper
producer. He has pledged support and stable funding for
state-run miner Codelco, and has promised to slash red tape that
had bogged down projects under outgoing President Michelle
    Chile's benchmark IPSA stock index jumped 7.3
percent in Monday trading.
    Shares of construction companies such as Besalco SA
, Socovesa SA, Paz Corp and SalfaCorp
SA rose more than 10 percent. Some banks and miners
also advanced by double digits.
    "Pinera's campaign agenda focused on investment and growth,
and we believe the administration will articulate policies with
that aim, which should help to consolidate the upbeat business
and consumer expectations," JPMorgan economists wrote in a
    "That said, Pinera's administration will need ... political
savvy to negotiate laws in a fragmented Congress."
    The Chilean peso strengthened 1.8 percent against
the dollar, its biggest one-day advance in a year and a half,
leading gains the region.
    Other currencies were range-bound amid doubts whether a
proposed U.S. tax cut would have a major impact on economic
growth, after the bill moved over the weekend another step
closer to passing.
    Uncertainty over whether the tax bill would indeed be pushed
through, as well as questions over its pro-growth effects, have
cast doubt on the outlook for inflationary pressures in the
United States, which has boosted expectations of higher interest
    Higher U.S. rates could dampen demand for high-yielding
assets, such as currencies from emerging markets.    
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                               daily %     YTD %
                                              change    change
 MSCI Emerging Markets              1126.41     0.71     29.72
 MSCI LatAm                         2765.71     1.87        16
 Brazil Bovespa                    73121.50     0.71     21.41
 Chile IPSA                         5617.48     7.31     35.32
 Chile IGPA                        28098.86     7.11     35.52
 Argentina MerVal                  27050.38     0.11     59.89
 Currencies                                  daily %     YTD %
                                              change    change
 Brazil real                         3.2912     0.49     -1.28
 Mexico peso                        19.0810     0.13      8.72
 Chile peso                           624.5     1.84      7.40
 Colombia peso                      2986.44     0.25      0.50
 Peru sol                             3.293    -0.12      3.67
 Argentina peso (interbank)         17.5600    -0.26     -9.60
 Argentina peso (parallel)            18.04    -0.44     -6.76
 (Reporting by Bruno Federowski; Editing by Frances Kerry)
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