June 21, 2018 / 8:49 PM / 24 days ago

EMERGING MARKETS-Mexico interest rate hike nudges peso, MSCI nod lifts Argentina stocks

 (Recasts with Mexico peso gains)
    By Miguel Gutierrez
    MEXICO CITY, June 21 (Reuters) - Mexico'S peso firmed
slightly on Thursday, supported by an interest rate hike by the
central bank, while the stock market in Argentina soared after
index provider MSCI upgraded the country to its emerging markets
index.
    Mexico's central bank raised its benchmark interest rate by
25 basis points to a more than nine-year high of 7.75 percent,
in a bid to counteract the effects of a peso slump and keep a
downward inflation trend on track.
    The market had been betting on the move by the bank to shore
up the peso, which firmed slightly after hitting a
1-1/2-year low it hit last week.
    "We think the effect will be temporary and limited," CI
Banco said in a report, warning that concerns about talks to
rework the NAFTA free trade deal and worries about the July 1
election could keep pressuring the peso.
    Argentina's benchmark MerVal stock index jumped more
than 6 percent following the announcement by index provider MSCI
late Wednesday that will guarantee more flows from funds that
track the gauge.
    The news was a respite from months of dismal economic news
and a recent slump in the currency to a record low.
    Latin American stocks broadly dipped in the wake of growing
trade tensions between the United States and China. 

    Brazil's benchmark Bovespa stock index shed nearly 3
percent, heading back toward a 10-month low after a two-day
rebound when bargain-hunting had lifted stocks. 
    Shares in state-controlled oil company Petróleo Berasileiro
SA, lender Itaú Unibanco SA and miner Vale
SA all sank.

 Key Latin American stock indexes and currencies at 1945 GMT:  
    
 Stock indexes                Latest     Daily pct   YTD pct
                                            change    change
 MSCI Emerging Markets         1,081.04      -1.12     -5.63
                                                    
 MSCI LatAm                    2,417.40      -1.98    -12.79
 Brazil Bovespa               70,107.18       -2.8     -8.24
 Mexico IPC                   46,452.00      -0.66     -5.88
 Chile IPSA                    5,396.94      -0.38     -3.01
 Chile IGPA                   27,287.16      -0.35     -2.48
 Argentina MerVal             30,928.22       6.21      2.87
 Colombia IGBC                12,087.46       0.15      6.30
 Venezuela IBC                69,105.46        2.1  5,370.93
                                                            
 Currencies                      Latest  Daily pct   YTD pct
                                            change    change
 Brazil real                     3.7675       0.37    -12.06
 Mexico peso                    20.2905       0.29     -2.92
 Chile peso                      639.35       0.09     -3.86
 Colombia peso                  2,951.5      -0.98      1.03
 Peru sol                         3.274       0.12     -1.13
 Argentina peso (interbank)     27.4900       1.13    -32.34
                                                    
 Argentina peso (parallel)         27.9       1.61    -31.08
                                                    
 
 (Additional reporting by Michael O'Boyle)
  
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