January 23, 2019 / 2:48 PM / 9 months ago

EMERGING MARKETS-Brazil stocks rise in broad-based rally, soft dollar lifts Latam currencies

    By Agamoni Ghosh
    Jan 23 (Reuters) - Stocks in Brazil's benchmark index rose
on Wednesday to near record-high levels, tracking broad-based
gains in global equities as investors returned to riskier assets
and on recovering oil prices.
    A weaker dollar lifted Latin America currencies, with
Brazil's real snapping a six-day losing streak.
    Sao Paulo's Bovespa index rose over 1.3 percent, led
by gains in shares of material and energy companies as oil
prices rose about 1 percent after official data indicated
slowing growth in U.S. shale oil output in coming years. 
    Investor sentiment was also buoyed after President Jair
Bolsonaro told a summit of chief executives at the World
Economic Forum at Davos that he would work to open up the
relatively closed economy, simplify taxes and privatize state
companies among other reforms.
    He did not, however, mention pension reform, his biggest
challenge to controlling a gaping budget deficit.
    "Everything other than pension reforms is sort of noise
right now and we think it is less likely anything will be known
until the president returns," said Christian Lawrence, Senior
Market Strategist, LatAm FX at Rabobank.
    Global markets recovered from earlier losses on Wednesday as
investors made a cautious return to riskier assets, with U.S. 
and European stocks higher even as worries about corporate and
economic growth lingered.
    In currencies, Brazil's real gained for the first
time in over a week, rising from three-week lows. 
    "Over the past week, BRL has been one of the weakest EM
currencies amid a reprieve in risk appetite coupled with mixed
local news flow," Morgan Stanley analysts said in a note. 
    Mexico's peso rose 0.2 percent with Chile's peso
 nearly matching those gains as the price of copper, the
country's main export, slightly advanced. 
    Stocks in Chile's IPSA index were marginally
higher with telecommunication company, Empresa Nacional de
Telecomunicaciones leading gains on the index. 
    Key Latin American stock indexes and currencies at 1415 GMT 
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1010.68         0
 MSCI LatAm                      2828.53       0.3
 Brazil Bovespa                 95958.55       1.3
 Mexico IPC                            -         -
 Chile IPSA                      5403.73      0.05
 Argentina MerVal                      -         -
 Colombia IGBC                         -         -
 Currencies                                daily %
 Brazil real                      3.8003      0.49
 Mexico peso                     19.1396      0.15
 Chile peso                       672.31      0.15
 Colombia peso                         -         -
 Peru sol                              -         -
 Argentina peso (interbank)            -         -

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Susan Thomas)
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