November 7, 2017 / 11:52 PM / in a year

EMERGING MARKETS-Brazil stocks fall on reform woes, Latam FX slips

 (Recasts with currency losses, updates prices)
    By Bruno Federowski
    SAO PAULO, Nov 7 (Reuters) - Brazilian stocks sank to a
two-month low on Tuesday on concerns a corruption probe would
sap the government's ability to further cut spending, while
Latin American currencies weakened. 
    Mexico's peso and Brazil's real lost ground as
the dollar broadly gained on expectations the United States
would raise interest rates faster than Europe. Higher U.S. rates
could attract yield-hungry investors away from emerging markets.
    Brazil's benchmark Bovespa stock index sank nearly
2.6 percent in its biggest one-day drop since May. 
    Investors are concerned that Brazilian President Michel
Temer will be unable to manage more government spending cuts
after corruption charges drained his political clout.
    Finance Minister Henrique Meirelles said on Tuesday that
Temer's pension overhaul plan, which investors regard as key to
curbing growth of public debt, could still be approved before
presidential elections next year.
    But traders remained skeptical that the reforms would be
meaningful and analysts have said that lawmakers allied to the
unpopular center-right president might water down the plan to
guarantee its passage.
    "The market is working with the assumption of a very limited
reform," analysts at Citibank wrote in a client note.
    Key Latin American stock indexes and currencies at 2315 GMT:
 Stock indexes                  Latest        Daily  YTD pct
                                                pct   change
 MSCI Emerging Markets            1,134.55     0.31    31.58
 MSCI LatAm                       2,766.01    -1.49    18.17
 Brazil Bovespa                  72,414.88    -2.55    20.24
 Mexico IPC                      49,004.52     0.08     7.37
 Chile IPSA                       5,490.82    -0.66    32.26
 Chile IGPA                      27,600.91    -0.62    33.12
 Argentina MerVal                28,120.22     0.51    66.22
 Colombia IGBC                   10,740.90     1.58     6.05
 Venezuela IBC                      711.93     0.36   -97.75
 Currencies                         Latest    Daily  YTD pct
                                                pct   change
 Brazil real                        3.2763    -0.56    -0.83
 Mexico peso                       19.1450    -0.70     8.31
 Chile peso                         634.35    -0.36     5.73
 Colombia peso                    3,033.98     0.07    -1.07
 Peru sol                            3.242    -0.12     5.31
 Argentina peso (interbank)        17.6550    -0.03   -10.08
 Argentina peso (parallel)           17.95     0.33    -6.30
 (Reporting by Bruno Federowski; Editing by Andrea Ricci and
Richard Chang)
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