November 8, 2017 / 4:10 PM / a year ago

EMERGING MARKETS-Brazil leads LatAm gains on pension overhaul assurances

    By Bruno Federowski
    SAO PAULO, Nov 8 (Reuters) - Brazilian markets on Wednesday
led the gains in Latin America as government officials assured
that they had not given up on plans to streamline the social
security system.
    Brazilian stocks sold off on Tuesday as skepticism grew that
unpopular President Michel Temer would manage to push through
pension reform.
    Investors widely see the pension bill as key to curbing
rising public debt and boosting long-term economic growth.
    But Finance Minister Henrique Meirelles said on Wednesday
that investors were wrong to think that the government had
"thrown in the towel," the latest official to try and assuage
market angst over the matter.
    A watered down version of the pension bill will be proposed
this week, a Congressional whip said.
    "Investors are likely to maintain a shred of hope of some
success this year still," analysts at H.Commcor brokerage wrote
in a client note.
    The benchmark Bovespa stock index rose 0.5 percent
after hitting a two-month low the day before. Shares of
blue-chips Itaú Unibanco Holding SA, Vale SA
 and Petróleo Brasileiro SA added the most
points to the index.
    The Brazilian real strengthened 0.8 percent, the
biggest gainer among currencies in Latin America, which were up
across the board. The Mexican peso rose 0.4 percent,
while the Colombian peso firmed 0.7 percent.
    Worries over possible delays to U.S. President Donald
Trump's tax reform plans cooled expectations of increased
inflation in the United States that could force the Federal
Reserve to increase rates faster than expected.
    A slower path of rate hikes could fuel demand for emerging
market assets, which offer high yields.
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets               1133.55    -0.09    31.58
 MSCI LatAm                          2791.78     0.93    18.17
 Brazil Bovespa                     72799.45     0.53    20.87
 Mexico S&P/BVM IPC                 49000.22    -0.01     7.36
 Chile IPSA                          5487.90    -0.05    32.19
 Chile IGPA                         27589.63    -0.04    33.06
 Argentina MerVal                   28270.51     0.53    67.10
 Colombia IGBC                      10728.04    -0.12     5.92
 Venezuela IBC                        712.18     0.04   -97.75
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.2516     0.76    -0.07
 Mexico peso                         19.0795     0.38     8.72
 Chile peso                            631.5     0.45     6.21
 Colombia peso                        3014.5     0.65    -0.43
 Peru sol                              3.241     0.03     5.34
 Argentina peso (interbank)          17.5300     0.74    -9.44
 Argentina peso (parallel)             17.86     0.78    -5.82
 (Reporting by Bruno Federowski, Editing by Rosalba O'Brien)
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