November 29, 2018 / 9:48 PM / a year ago

EMERGING MARKETS-Latam shares, FX rise; Brazil stocks hit record high

 (Recasts throughout, updates prices)
    By Susan Mathew
    Nov 29 (Reuters) - Latin American shares rose on Thursday
with Brazil stocks hitting an all time high and Mexican shares
climbing 2 percent, while most regional currencies firmed as the
dollar steadied.
    Minutes of the U.S. Federal Reserve's November meeting
showed it opened the debate on when to pause interest rate
hikes, boosting risk appetite and bolstering gains among Latin
American stocks.
    Meanwhile, the greenback held steady after its tumble last
session on U.S. Federal Reserve chair Jerome Powell's perceived
dovish comments, helping the Mexican and Argentine pesos
 rise and extending gains to a third straight day. 
    "The risk of Fed hikes has been dialed back in the wake of
Powell's comments," said Koon Chow, FX strategist at UBP, adding
that emerging market currencies have the benefit of trading at
cheap levels.
    The Mexican peso rose 0.2 percent with focus on the
swearing-in of the new leftist government over the weekend. 
    "The Mexican foreign exchange market is still waiting for
important events, such as the inaugural speech of the
President-elect Andrés Manuel López Obrador and the trade
meeting between (U.S. President Donald) Trump and (Chinese
President) Xi Jinping (at the G20 summit)," analysts at CI Banco
said in a note.
    But, analysts at Morgan Stanley say Mexican local assets
have already entered a new volatility regime and markets have
started to increasingly price in a higher probability of fiscal
slippage as investors remained wary of the policy tact of the
incoming government.
    "With the 2019 budget (to be presented in early December) as
the next potential catalyst for further MXN underperformance, we
stay bearish on the peso," they said. Both stocks and the peso
are set to clock losses over the month.
    The Brazilian real ended a volatile session slightly
lower with analysts pinning the volatility on traders seeking to
influence the month-end Ptax rate that is used as a benchmark
for futures contracts.
    The real was also pressured by concerns about a delay in the
Senate vote on a future offshore oil auction that could raise an
estimated 130 billion reais ($33.90 billion).
    Among stocks, Brazil's benchmark Bovespa stock index
closed half a percent higher after hitting an all time high
earlier in the session.
    Toll road operator CCR SA was the top performer
after it agreed to settle a Sao Paulo state civil lawsuit, while
shares of Suzano Papel e Celulose rose on securing
regulatory approval to buy Fibria Celulose.
    Mexican shares climbed for a third straight session
and closed 2.1 percent higher.
    In Argentina, both the peso and stocks logged
gains, with the currency posting its best day in a month.    
    Ahead of the G20 summit set to begin on Friday, financial
markets of the host country closed early on Thursday, and will
be closed for trading on Friday.

    Key Latin American stock indexes and currencies at 2126 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          998.05      0.64    -13.85
 MSCI LatAm                    2629.38      1.75     -7.03
 Brazil Bovespa               89709.56      0.51     17.42
 Mexico IPC                   41847.46      2.09    -15.21
 Chile IPSA                    5156.43      0.83      0.83
 Argentina MerVal             31482.58       1.1      4.71
 Colombia IGBC                11994.61       0.1      5.49
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    3.8502      0.17    -13.94
 Mexico peso                   20.2525      0.19     -2.73
 Chile peso                      669.2      0.90     -8.15
 Colombia peso                 3236.45      0.91     -7.86
 Peru sol                        3.381     -0.21     -4.26
 Argentina peso                37.7000      2.07    -50.66
 Argentina peso                  36.25      1.38    -46.95

 (Additional reporting by Sruthi Shankar in Bengaluru and
Claudia Violante in Sao Paulo; Editing by Chris Reese)
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