January 4, 2018 / 5:32 PM / a year ago

EMERGING MARKETS-Brazil's Bovespa hits record high amid New Year optimism

    SAO PAULO, Jan 4 (Reuters) - 
    Brazil's benchmark Bovespa index led gains among its Latin
American peers amid a bullish day in the region, hitting
all-time highs, as domestic and international investors showed
optimism about the nation's general direction at the start of
the year.
    Investors' eyes are currently focused on a number of
political developments in Latin America's largest economy, such
as a corruption trial for leftist ex-president Luiz Inacio Lula
da Silva at the end of January. 
    Should a conviction against the popular former leader be
upheld, he would barred from running in October presidential
elections, which would please investors who widely seem him as
the left's best chance of winning.
    In recent days, the cabinet of conservative President Michel
Temer has accelerated a reshuffle, as multiple cabinet members
prepare to run for Congress in the coming elections.

    "Political maneuvering accelerated and a strong inflow of
foreign investors is supporting a stock market rally at the
beginning of 2018," analysts at Guide Investimentos wrote in a
note to clients.
    The Bovespa climbed 1.31 percent in afternoon
trading, hitting intraday record highs for the second straight
session, and the index looked on track to book its ninth
straight trading day in the black.
    The worst performing major market in the region was
Argentina, where investors began booking gains after 11 straight
bull sessions. The Merval equities index had ticked up a
relatively modest 0.33 percent after lingering in the red for
much of the day, while the country's peso currency
had fallen 0.78 percent.
    Analysts said there were lingering jitters in the market
over the Argentine central bank's decision in late December to
ease the official inflation target for 2018.
    "Monetary policy continues to be a focus of uncertainty,
even after the change in the inflation target to 15 percent
annually was made official," analysts at Delphos Investment
Key Latin American stock indexes and currencies at 1708 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1193,10      0,75      2,22
 MSCI LatAm                      2969,57      1,75       3,2
 Brazil Bovespa                 79018,61      1,31      3,42
 Mexico S&P/BVM IPC             50006,27      0,45      1,32
 Chile IPSA                      5637,27      0,37      1,31
 Chile IGPA                     28323,21      0,34      1,22
 Argentina MerVal               31579,39      0,33      5,03
 Colombia IGBC                  11678,74      1,02      2,71
 Venezuela IBC                   1263,67      0,14    -96,01
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      3,2247      0,32      0,76
 Mexico peso                     19,2450      0,52      7,79
 Chile peso                        604,9      0,31     10,88
 Colombia peso                   2887,92      0,48      3,93
 Peru sol                          3,202      0,47      6,62
 Argentina peso (interbank)      18,6050     -0,78    -14,67
 Argentina peso (parallel)         19,33     -0,21    -12,98

 (Reporting by Gram Slattery; Editing by Bernadette Baum)
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