June 12, 2018 / 6:17 PM / 3 months ago

EMERGING MARKETS-Brazil stocks rise after rout; real firms after intervention

    SAO PAULO, June 12 (Reuters) - Brazil's benchmark Bovespa
equities index and real currency both rose
moderately on Tuesday as traders saw room to take a breather
amid a rocky stretch for Latin America's largest economy.
    After an 8 percent fall in the Bovespa over the last five
sessions, a slow news day at home combined with mixed political
signals abroad resulted in limited buying opportunities.
    Traders, however, warned that the rise was likely to be
short-lived and was unsupported by fundamentals, with many
bracing for cuts to Brazil's 2018 growth forecast for gross
domestic product and with no moderate, market-friendly candidate
gaining traction in the polls heading into the country's October
presidential election.
    "There's a clear absence of positive triggers for a buyers'
recovery and an upward trend," said Régis Chinchila, an analyst
at Rio de Janeiro-based Terra Investimentos.
    The Bovespa climbed 0.5 percent in afternoon trade. 
    Among the biggest gainers were electronics retailers
Magazine Luiza SA and Via Varejo SA, which
climbed 3.3 percent and 6.8 percent, respectively, as it became
clear that the long-term effects of an 11-day truckers' strike
in late May would not be severe.
    Shares of steelmakers Usinas Siderurgicas de Minas Gerais SA
 and Cia Siderurgica Nacional SA rose up
3.5 percent and 5.6 percent, respectively, as Brazil's president
signed a decree loosening mining restrictions.
    Brazil's real, which hit two-year lows in recent sessions
before the central bank intervened in the currency market,
climbed 0.53 percent against the dollar on Tuesday, trading at
3.70 to 1. That bucked a trend among major Latin American
currencies, which generally fell on Tuesday amid expectations
the U.S. Federal Reserve could signal two future interest rate
hikes at its policy meeting this week.
    Traders said the real was supported by the expectation that
Brazil's central bank, which said it would offer up to $20
billion in currency swaps through the end of this week, would
continue to support the currency.
    "The market is still cautious because of the Fed meeting and
due to domestic issues, but it remains measured with the central
bank acting," said José Carlos Amado, currency trader at Sao
Paulo brokerage Spinelli.  
    The biggest loser among Latin American equities markets on
Tuesday was Argentina's Merval index.
    
Key Latin American stock indexes and currencies at 1736 GMT:
    
 Stock indexes               Latest      Daily    YTD pct
                                          pct      change
                                         change   
 MSCI Emerging Markets        1,139.70      0.02     -1.64
                                                  
 MSCI LatAm                   2,501.97     -0.18    -11.37
                                                  
 Brazil Bovespa              72,666.38       0.5     -4.89
 Mexico IPC                  46,783.25      1.04     -5.21
 Chile IPSA                   5,538.66      0.31     -0.47
 Chile IGPA                  27,999.16      0.27      0.07
 Argentina MerVal            31,152.70     -1.74      3.62
 Colombia IGBC               12,281.52      0.24      8.01
 Venezuela IBC               41,824.21     -0.43  3,211.13
                                                          
 Currencies                  Latest      Daily    YTD pct
                                          pct      change
                                         change   
 Brazil real                    3.7059      0.53    -10.59
 Mexico peso                   20.6800     -0.39     -4.74
 Chile peso                      636.2     -0.63     -3.39
 Colombia peso                2,858.42      0.15      4.32
 Peru sol                        3.271     -0.18     -1.04
 Argentina peso                25.7900      1.20    -27.88
 (interbank)                                      
 Argentina peso                   26.2     -0.38    -26.60
 (parallel)                                       
 

 (Reporting by Claudia Volante and Paula Arend Laier
additional reporting by Gabriela Mello; writing by Gram Slattery
editing by Leslie Adler)
  
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