September 24, 2018 / 4:59 PM / a month ago

EMERGING MARKETS-Brazil markets underpeform on profit-taking before new poll

    By Bruno Federowski
    BRASILIA, Sept 24 (Reuters) - The Brazilian real
underperformed its peers as traders booked profits from last
week's gains ahead of another poll on next month's elections due
later on Monday.
    Volatility has spiked in Brazilian markets ahead of the most
hard-to-predict presidential vote in decades, with assets
reacting sharply to each voter intention survey.
    Far-right lawmaker Jair Bolsonaro has consistently led in
recent polls but he would face stiff competition from leftist
Fernando Haddad in a likely second-round vote.
    Traders fear Haddad could take a lax stance on fiscal
policy, failing to curb the deficit and driving away the
possibility that Brazil will recover its investment grade
sovereign rating.
    The real slipped 0.7 percent on a day when most
currencies in the region were range-bound. The Mexican peso
 slipped 0.2 percent, while the Colombian peso firmed 0.3
percent.
    The Brazilian currency had posted its best week since July
2017 last week as traders bet on a Bolsonaro victory.
    Brazil's benchmark Bovespa stock index fell 1.3
percent, weighed down by a decline in shares of Vale SA
 after the miner's stock closed at a record high on
Friday.
    Blue-chip lenders such as Banco do Brasil SA,
Banco Bradesco SA and Itaú Unibanco Holding SA
 also fell, dragged down by anxiety over the vote.
    
    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                              daily %    YTD %
                                             change   change
                                  Latest             
 MSCI Emerging Markets             1051.43      1.4    -9.24
 MSCI LatAm                        2546.94     1.49    -9.94
 Brazil Bovespa                   78441.73    -1.26     2.67
 Mexico IPC                       49210.59    -0.27    -0.29
 Chile IPSA                        5399.45    -1.14    -1.14
 Argentina MerVal                 33601.18    -2.11    11.76
 Colombia IGBC                    12377.13     1.16     8.85
                                                            
 Currencies                                 daily %    YTD %
                                             change   change
                                                     
                                    Latest           
 Brazil real                        4.0745    -0.70   -18.68
 Mexico peso                       18.8600    -0.15     4.45
                                                     
 Chile peso                          668.8    -0.46    -8.10
 Colombia peso                     2987.53     0.28    -0.19
 Peru sol                            3.297    -0.12    -1.82
 Argentina peso (interbank)        37.3200    -0.11   -50.16
                                                     
 Argentina peso (parallel)              38     0.66   -49.39
                                                     
 
 (Reporting by Bruno Federowski
Editing by Tom Brown)
  
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