November 1, 2018 / 9:37 PM / 16 days ago

EMERGING MARKETS-Latam FX, stocks surge; Brazil shares hit record high

    Nov 1 (Reuters) - Latin American stocks soared on Thursday
with Brazil shares touching an all-time high and Argentina's
Merval stock index jumping 6 percent, as global risk appetite
recovered on strong corporate earnings and signs that the
Sino-U.S. trade war could be contained.
    The region's currencies also firmed as the dollar fell
sharply from recent highs, with the Mexican peso up more
than 1 percent. The dollar index was on track to post its
worst session since January as safe-haven demand receded.
    Among stocks, the MerVal closed at its highest in
four weeks, and Mexico's IPC stock index rose more than 3
percent, taking the MSCI index of Latin American stocks 2
percent higher.
    The gains were bolstered by U.S. President Donald Trump
saying he had a "very good" talk with Chinese President Xi
Jinping on trade.
    Heading into a three-day weekend, Brazil stocks
climbed up 1.8 percent to a record high, before closing up 1.1
percent. Gains were driven by a 5.7 percent rise in lender Banco
Bradesco after it reported a 13.7 percent rise in
quarterly profit.  
    The real was 0.2 percent firmer, with investors
cheering Brazil's far-right President-elect Jair Bolsonaro's
cabinet appointments - a key indicator of the new government's
adherence to campaign promises.
    On Thursday, Bolsonaro appointed anti-graft judge Sergio
Moro as his justice minister and astronaut Marcos Pontes as
science and technology minister.
    "So far they are solid," Alejo Czerwonko, emerging markets
strategist at UBS Global Wealth Management's Chief Investment
Office, said of the appointments.
    "So far what has been announced is in line with his
intentions to consolidate the government, implement micro
economic changes to make it easier for people in the country to
do business, reduce the size of the government, reduce red tape
and improve the application of the rule of law."
     Mexico's peso posted its best session in three weeks,
reflecting the broader emerging markets rally, Czerwonko said.
    The gains come a day after the peso had fallen on rating
agency Fitch's warning that it could downgrade Mexico's credit
rating, citing concerns of the incoming government's policies.
This could precipitate negative actions by other rating
agencies, according to Czerwonko.
    Stock markets in Chile and Peru were closed for local
holidays on Thursday.
    Brazil and Mexico will be closed on Friday for local
holidays.
    
    Key Latin American stock indexes and currencies at 2046 GMT:
 Stock indexes                  Latest   Daily %
                                          change
 MSCI Emerging Markets           971.44     1.62
                                         
 MSCI LatAm                     2718.52     2.04
                                         
 Brazil Bovespa                88419.05     1.14
                                         
 Mexico IPC                    45446.83     3.42
                                         
 Argentina MerVal              31308.63     6.16
                                         
 Colombia IGBC                 12177.34    -1.75
                                         
                                                
 Currencies                              Daily %
                                          change
                                 Latest  
 Brazil real                     3.6961     0.19
                                         
 Mexico peso                    20.1220     1.03
                                         
 Colombia peso                     3189     0.82
 Peru sol                         3.371     0.00
                                         
 Argentina peso (interbank)     35.6600     0.81
                                         
 

 (Reporting by Susan Mathew in Bengaluru; Editing by Richard
Chang)
  
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