August 27, 2014 / 5:51 PM / 3 years ago

EMERGING MARKETS-Brazil's Bovespa extends rally on election outlook; Oi, TIM soar

SAO PAULO, Aug 27 (Reuters) - Brazil's benchmark Bovespa
stock index rose to its highest level in 19 months on Wednesday
after two polls suggested President Dilma Rousseff may lose her
re-election bid in October.
    The broader MSCI Latin American stock index 
rose its most in over two weeks, while the region's currencies
were mixed.
    A widely watched poll released on Wednesday showed Rousseff
losing to environmentalist Marina Silva in an expected runoff,
echoing the results of another poll released late on Tuesday.
    Many investors have accused Rousseff of mismanaging the
economy and have criticized her for enacting policies
detrimental to minority shareholders of state-run companies such
as oil producer Petroleo Brasileiro SA, known as
    Petrobras preferred shares rose 4.5 percent on Wednesday and
are up about 22.5 percent over the past nine sessions as
Rousseff's chances continue to dim.
    The index was also boosted by shares of telecommunications
firms Grupo Oi SA and TIM Participacoes SA
. The shares soared after Grupo Oi announced it had
hired investment bank Grupo BTG Pactual SA to advise
on a plan to win control of TIM. 
    In currency markets, the Brazilian real strengthened
for a second straight day against the dollar, as traders see a
non-Rousseff government reducing the country's risk profile
among global investors.
    Chile's peso fell for the second straight session,
partially due to lower prices for copper, the country's
main export.
    Chile's central bank is expected to continue with its easing
cycle next month, cutting the benchmark interest rate 25 basis
points to 3.25 percent, according to the prevailing view of
traders in a central bank poll published on Wednesday.
    The Mexican peso strengthened slightly against the
dollar after data on Wednesday showed a rebound in Mexican
factory exports in July, raising hopes for a strengthening
recovery in Latin America's second-largest economy.
    Key Latin American stock indexes and currencies at 1724 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1094.46      0.62      8.49
 MSCI LatAm                      3629.54      1.69     11.51
 Brazil Bovespa                 61078.13       2.1     18.58
 Mexico IPC                     45574.45      0.24      6.66
 Chile IPSA                      3962.54      0.28      7.12
 Chile IGPA                     19285.64      0.28      5.81
 Argentina MerVal                9844.71      3.38     82.61
 Colombia IGBC                  14532.12      0.56     11.18
 Peru IGRA                      16990.77      0.29      7.85
 Venezuela IBC                   2596.45      2.45     -5.12
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      2.2584      0.23      4.36
 Mexico peso                     13.0784      0.14     -0.37
 Chile peso                        589.8     -0.64    -10.80
 Colombia peso                   1929.14      0.15      0.15
 Peru sol                          2.842     -0.21     -1.72
 Argentina peso (interbank)       8.4025      0.03    -22.73
 Argentina peso (parallel)          14.4     -1.39    -30.56
 (Reporting by Bruno Federowski; Writing and additional
reporting by Asher Levine; Editing by Jonathan Oatis)

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