November 7, 2019 / 3:37 PM / 3 months ago

EMERGING MARKETS-Brazil's real dips again; trade optimism boosts Bovespa

    By Sruthi Shankar
    Nov 7 (Reuters) - Brazil's real dipped on Thursday, adding
to its worst decline in three months, after the country held a
disappointing second round of oil auctions, although optimism
over a U.S.-China trade deal and positive earnings supported
Brazilian stocks.
    The real dropped 0.4% to 4.098 per dollar. The
currency had shed about 2.2% on Wednesday after Brazil's
biggest-ever oil auction frustrated investors' expectations as
high prices and the dominant role of state-run oil company
Petrobras scared off global oil majors.
    The country held a second disappointing oil auction on
Thursday, with major global oil firms passing again.
    The only block awarded in Thursday's auction went to
Petrobras, and Chinese state firm CNODC, which offered the
minimum bid. Four other blocks received no bids.
    "While Petrobras' win might remove the need to buy USD, the
result meant that there would be close to no inflow to the
country by way of signing bonuses," Citi's Dirk Willer wrote in
a client note, adding that "we think the market will unwind some
of the (BRL) outperformance over the past two weeks."
    Sao Paulo-listed shares, however, gained 0.6% as
stock markets across the globe rose after China's Commerce
Ministry said the United States and China were working on a deal
that would roll back trade tariffs in different stages.

    Shares in Banco do Brasil SA rose 0.3% after it
reported a 33.5% jump in third-quarter profit, and Switzerland's
UBS Group AG said the two banks are set to launch an
investment bank in South America.
    The top gainer on the index was refiner Ultrapar
Participações SA, which was up 6% after it reported
better-than-expected net income in the third quarter. 
    Airline Azul SA fell 0.4% after reporting a net
loss of 438 million reais, affected heavily by the depreciation
of the real.
    Trade optimism helped the Chilean peso hold steady
even as data showed the country's export revenue plunged by
one-fifth to $5.3 billion in October, as the value of copper
exports from the world's top producer fell.
    Mexico's peso was also little changed after data
showed inflation stayed close to the central bank's 3% target in
October, fueling expectations of further interest rate cuts.

    A jump in oil prices to more than $62 per barrel helped
Colombia's peso gain 0.2%.  
    Key Latin American stock indexes and currencies at 1435 GMT:
       Stock indexes                  Latest       Daily %
 MSCI Emerging Markets                  1073.04          0.39
 MSCI LatAm                             2779.06         -0.27
 Brazil Bovespa                       108988.17          0.58
 Mexico IPC                                   -             -
 Chile IPSA                             4607.08          0.17
 Argentina MerVal                      35674.41          0.49
 Colombia IGBC                                -             -
           Currencies                 Latest       Daily %
 Brazil real                             4.0980         -0.42
 Mexico peso                            19.1518         -0.06
 Chile peso                               740.9          0.01
 Colombia peso                          3329.49          0.17
 Peru sol                                3.3398         -0.02
 Argentina peso (interbank)             59.6000          0.10

 (Reporting by Sruthi Shankar in Bengaluru
Editing by Paul Simao)
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