January 17, 2019 / 9:51 PM / a month ago

EMERGING MARKETS-LatAm stocks boosted by Brazil record high; FX weaker

 (Recasts throughout, updates prices)
    By Susan Mathew
    Jan 17 (Reuters) - Most Latin American stocks rose on
Thursday, with Brazil shares scaling new heights amid hopes that
the new government's promised pension reforms plans may be
revealed earlier than expected.
    The MSCI index of Latin American shares
touched its highest level in eight months, with Sao Paulo's
Bovespa stock index reversing early losses to close up 1
percent at an all-time high.
    Brazil's Economy Minister Paulo Guedes is expected to detail
the pension reform proposal at the World Economic Forum's annual
meeting in Davos next week, a government source said on
Thursday.
    Brazilian President Jair Bolsonaro's chief of staff earlier
this week had said that the government will settle on a model
for its pension reform proposal only after Bolsonaro returns
from Davos.
    "The stock market rises on news that the focus of the
government in Davos will be on welfare reform and
privatizations, in addition to news of falling import tariffs,"
said Pedro Menezes, a partner and member of the stock investment
committee at Occam Brasil Gestão de Resources.        
    Gains on the Bovespa were broad-based and driven by
commodity stocks that were bolstered by higher prices for iron
ore and recovering oil prices.
    Iron ore miner Vale SA's 3 percent rise was the
biggest boost, followed by a 1.4 percent climb by shares of
state oil company Petrobras.
    In Mexico, the benchmark IPC extended gains to a
third straight session, while stocks in Buenos Aires
climbed 0.6 percent, keeping up with the rise in major indexes
on Wall Street.
    Regional currencies on the other hand,
weakened against a steady dollar.
    Mazen Issa, a senior FX Strategist at TD Securities, expects
world currency markets to be rangebound until the uncertainties
around Britain's exit from the European Union clear up. He
emphasizes the preference for the Japanese yen as the
preferred safe-haven currency.  
    The Mexican peso fell 0.6 percent against the dollar
and posted its worst trading day in over a month, while Brazil's
real hit a two-week low.
    The Argentine peso declined as the central bank
hedged in dollars. Analysts expect this dollar buying to
continue for the next 60 days. 
    Bucking the trend, Peru's sol firmed 0.2 percent to
an over three month high. 
        
    Key Latin American stock indexes and currencies:
    
 Stock indexes                     Latest      Daily
                                                pct
                                               change
 MSCI Emerging Markets              1,008.99     -0.04
                                              
 MSCI LatAm                         2,835.03      0.04
 Brazil Bovespa                    95,351.09      1.01
 Mexico IPC                        43,964.78      0.33
 Chile IPSA                         5,435.94      0.31
 Argentina MerVal                  34,262.74      0.63
 Colombia IGBC                     11,647.93     -0.07
                                                      
 Currencies                        Latest      Daily
                                                pct
                                               change
 Brazil real                          3.7503     -0.10
 Mexico peso                         19.0131     -0.66
 Chile peso                            669.9     -0.20
 Colombia peso                       3,130.3     -0.47
 Peru sol                              3.325      0.18
 Argentina peso (interbank)          37.6800     -0.48
                                              
 
 (Additional reporting by Paula Arend Laier in Sao Paulo and
Walter Bianchi in Buenos Aires; editing by G Crosse)
  
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