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EMERGING MARKETS-Brazil stocks up for 2nd day on reform hopes; political woes linger
May 24, 2017 / 4:07 PM / 4 months ago

EMERGING MARKETS-Brazil stocks up for 2nd day on reform hopes; political woes linger

    By Bruno Federowski
    SAO PAULO, May 24 (Reuters) - Brazilian stocks rose for a
second day on Wednesday, supported by efforts by President
Michel Temer's government to maintain an ambitious reform agenda
amid growing political unrest.
    Temer's plans to streamline Brazil's pension system cleared
another hurdle in Congress on Tuesday. House speaker Rodrigo
Maia said a vote in the full lower house could take place
between June 5 and June 12, clearing the way for a final Senate
vote.
    The benchmark Bovespa stock index rose 1.7 percent,
led by stocks which had suffered deeply since tapes showing
Temer allegedly condoning bribes to silence a witness in a
corruption case went public last week.
    Shares of logistics operator Rumo Operadora Multimodal SA
 rose for a second day, rebounding from a 23.5 percent
three-day drop.
    The rate-sensitive stock was bolstered by a decline in
yields of interest rate futures as traders pared back bets that
the central bank would be forced to cut rates at a slower pace
than expected.
    Still, concerns over the political environment lingered,
driving the Brazilian real lower. Traders said volatility
is likely to remain elevated in the medium term as the crisis
drags on.
    Other Latin American currencies see-sawed on thin trading
volumes ahead of the release of the minutes of the Federal
Reserve's last policy meeting later on Wednesday. The Mexican
peso strengthened 0.3 percent, while the Colombian peso
 was nearly flat.
    Traders have been eagerly seeking hints over the pace of
U.S. rate hikes in coming months after a batch of mixed economic
data cast doubt on expectations of a fast tightening. Higher
U.S. rates could dampen demand for high-yielding emerging market
assets.
    
    Key Latin American stock indexes and currencies at 1555 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
                                   Latest              
 MSCI Emerging Markets               1004.79     0.03    16.49
 MSCI LatAm                          2558.70     0.85     8.39
 Brazil Bovespa                     63672.95     1.61     5.72
 Mexico IPC                         49385.78      0.7     8.20
 Chile IPSA                          4848.34      0.3    16.79
 Chile IGPA                         24338.48     0.28    17.38
 Argentina MerVal                   21611.48     0.42    27.74
 Colombia IGBC                      10757.65     0.01     6.22
 Venezuela IBC                      72689.66     0.06   129.27
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                      Latest           
 Brazil real                          3.2776    -0.38    -0.87
 Mexico peso                         18.5655     0.29    11.73
 Chile peso                           673.31     0.24    -0.39
 Colombia peso                       2904.22    -0.01     3.35
 Peru sol                              3.274     0.21     4.28
 Argentina peso (interbank)          16.1000     0.00    -1.40
                                                       
 Argentina peso (parallel)             16.22     0.37     3.70
                                                       
 
 (Reporting by Bruno Federowski; Editing by James Dalgleish)
  

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