January 2, 2020 / 2:34 PM / 20 days ago

EMERGING MARKETS-Latam stocks gain with Brazil leading after China stimulus

    * Brazil stocks stay near record levels 
    * Investors cheer China's banks' reserve ratios cut
    * Chilean peso weakens as economic activity declines in Nov.

    By Shreyashi Sanyal
    Jan 2 (Reuters) - Brazil stocks began the new year with a 1%
rise on Thursday, leading Latin American stocks higher, and
regional currencies also rallied despite a strong dollar as
trade optimism and policy easing by China lifted global
sentiment.
    The People's Bank of China said it was reducing the cash
that banks must hold as reserves. The central bank has now cut
reserve ratios eight times since early 2018 to give banks more
money to lend, with economic growth slowing to its weakest pace
in nearly 30 years.
    Markets were also encouraged by U.S. President Donald
Trump's announcement on Tuesday that Phase 1 of trade deal with
China would be signed on Jan. 15 at the White House. 
    Sao Paulo's commodity-heavy Bovespa index stayed
near record highs with iron ore miner Vale rising
1.2% as investors cheered the central bank's move in China, a
major destination for Latin America's commodity exports. 
    The Brazilian stock index also got a lift from financial
exchange operator B3 after the company said it is
introducing a new pricing structure that will reduce and
simplify fees investors pay to trade stocks and over-the-counter
products.
    MSCI's index for Latin American stocks rose
0.9% on Thursday, while the index for currencies
gained 0.2%. 
    A stronger dollar, which snapped a six-day losing streak,
kept a check on further gains in emerging market currencies.
    Still, the Brazilian real, Mexico's peso and
the Colombian peso all firmed between 0.1% and 0.8%.  
    The Chilean peso was one of the laggards in the
region as the central bank said economic activity dropped in
November, led by a decline in mining activity, as the impact of
nearly two months of unrest began to register in the world's top
copper producer.    
    Argentina's new government announced the issuance of $1.326
billion of dollar-denominated Treasury Bills, to be directly
subscribed by the central bank, according to a decree in the
official Gazette on Thursday.

    Key Latin American stock indexes and currencies at 1412 GMT:
    
  Stock indexes            Latest        Daily %
                                         change
 MSCI Emerging                1121.21         0.59
 Markets                               
 MSCI LatAm                   2942.53         0.85
                                       
 Brazil Bovespa             117024.32         1.19
                                       
 Mexico IPC                         -            -
                                       
 Chile IPSA                   4707.04          0.8
                                       
 Argentina MerVal                   -            -
                                       
 Colombia COLCAP                    -            -
                                       
                                                  
     Currencies            Latest        Daily %
                                         change
 Brazil real                   4.0215        -0.23
                                       
 Mexico peso                  18.8730         0.28
                                       
 Chile peso                    754.85        -0.48
                                       
 Colombia peso                3257.87         0.84
                                       
 Peru sol                      3.3018         0.31
                                       
 Argentina peso               59.8150         0.16
 (interbank)                           
                                       
 

    
 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Will
Dunham)
  
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