January 10, 2020 / 8:38 PM / 15 days ago

EMERGING MARKETS-Chile stocks rise 2%, Brazil shares down for 6th day

 (Updates prices)
    * Brazil stocks log first weekly loss in six weeks
    * Mexican peso at near nine-month high 
    * Brazil consumer inflation rises slightly above target 

    By Susan Mathew
    Jan 10 (Reuters) - Most Latin American stock markets rose on
Friday as easing U.S.-Iran tensions and rising hopes for the
signing of a Phase One U.S.-China trade deal lifted sentiment,
while Mexico's peso notched a near nine-month high against the
dollar.
    Chile shares closed at an 11-week high on Friday,
while Mexican shares logged their third straight session
of gains.
    Investor sentiment was dented earlier in the week on
concerns of a rise in tensions between the United States and
Iran after a U.S. drone strike that killed a top Iranian
general. 
    The absence of further military action by both countries and
talk of a Sino-U.S. trade deal being signed next week helped
investors regain some risk appetite, however. 
    "Things have calmed down on signs that neither side wants to
escalate things, and risk assets are trying to climb back," said
Win Thin, global head of emerging market currency strategy at
Brown Brothers Harriman.
    Brazil shares fell 0.2% in volatile trading to
extend losses to a sixth session - its longest stretch of losses
since May 2016, as lenders and energy stocks weighed. The market
lost around 1.6% on the week after five straight weeks of gains,
over which time it added 8.5%.
    Brazil's real firmed 0.1%, giving up some sessions
gains. 
    Consumer inflation in Brazil accelerated in 2019 to a
three-year high, data showed on Friday, edging past the central
bank's mid-point.
    Economists said the spike was not enough to change the
outlook for weak inflationary pressures amid a sluggish economic
recovery, leading some to forecast even lower interest rates
this year after four rate cuts to record lows in 2019. 
    "But inflation is high enough that the central bank has to
be cautious about cutting rates," BBH's Thin warned. The central
bank's next policy meeting is scheduled for Feb. 5. 
    In Mexico, a day after data showed inflation fell further
below its central bank's target, the national statistics agency
said industrial output in November rose 0.8% from the previous
month but fell 2.1 percent in unadjusted terms from November
2018.
    Mexico's peso rose 0.3% to its highest since April
2019. 
    Chile's peso slipped 0.8%, tracking copper prices
lower. The currency lost 1.2% this week after the central bank
suspended interventions in the foreign exchange market that were
introduced late last year when violent protests sent the
currency to all-time lows.
    
    Key Latin American stock indexes and currencies at 1949 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1133.09      0.33
                                        
 MSCI LatAm                    2910.39     -0.24
                                        
 Brazil Bovespa              115741.00     -0.18
                                        
 Mexico IPC                   44651.81      0.18
                                        
 Chile IPSA                    4996.19         2
                                        
 Argentina MerVal             42868.34     1.981
                                        
 Colombia COLCAP               1652.97     -0.03
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    4.0888     -0.11
                                        
 Mexico peso                   18.7900      0.22
                                        
 Chile peso                      771.8     -0.56
                                        
 Colombia peso                  3268.2     -0.50
 Peru sol                        3.331     -0.33
                                        
 Argentina peso                 59.630      0.17
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Sonya
Hepinstall)
  
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