October 12, 2018 / 2:57 PM / 2 months ago

EMERGING MARKETS-Latam stocks, FX rise as risk aversion lessens on Wall St bounce

    Oct 12 (Reuters) - Latin American currencies and stocks were
on-pace to log a fourth straight week of gains, with stocks
getting a boost on Friday from a global recovery in sentiment as
Wall Street rose after a two-day selloff.
    Thanks to Brazil and Argentina's gains on domestic factors,
Latin American assets have been largely insulated from the
global risk aversion that was spurred by concerns over Italy's
finances, trade war fears and rising borrowing costs.
    While the dollar rebounded from October lows as investors
focused on the strength in the U.S. economy, most developing
market currencies had strengthened earlier in the day on the
greenback's weakness due to softer-than-expected U.S. inflation
data out on Thursday.
    Still, the Mexican peso extended gains to a second
day "in an environment of recovery in emerging market currencies
against the dollar," analysts at Santander said in a note.
    On the week, however, the peso is on-pace to clock a second
week of losses in line with broader developing market peers
, which are also poised to record weekly losses.
    Mexico City's IPC stock index rose after two days as
Wall Street's recovery encouraged risk appetite.
    Elsewhere, Argentina's currency strengthened more
than 1 percent, and looked set to log its second week of gains
after the inflation-racked country effected economic reforms
post a funding deal with the IMF.
    Markets in Brazil were closed for a local holiday. On the
week, the real gained 1.5 percent, buoyed by optimism regarding
the country's presidential election as market-preferred front
runner Jair Bolsonaro kept his lead and looked poised to win the
election.
    The Bovespa stock index added 0.7 percent over the
same period, but gains were capped by external factors such as
the sell-off on Wall Street.
    Key Latin American stock indexes and currencies at 1432 GMT:
 Stock indexes                           Daily %     YTD %
                                          change    change
                              Latest              
 MSCI Emerging Markets           954.66    -3.15    -17.59
                                                  
 MSCI LatAm                     2666.38    -0.95     -5.72
                                                  
 Mexico IPC                    47864.83     0.64     -3.02
                                                  
 Chile IPSA                     5198.14     0.57      0.57
                                                  
 Argentina MerVal              28810.06     4.33     -4.18
                                                  
 Colombia IGBC                 12338.96     0.51      8.52
                                                  
                                                          
 Currencies                              Daily %     YTD %
                                          change    change
                                 Latest           
 Mexico peso                    18.9040     0.40      4.21
                                                  
 Chile peso                       677.6     0.62     -9.29
                                                  
 Colombia peso                   3081.1     0.24     -3.22
 Peru sol                          3.33    -0.06     -2.79
                                                  
 Argentina peso (interbank)     36.0500     1.66    -48.40
                                                  
 Argentina peso (parallel)        36.75     2.04    -47.67
                                                  
 


 (Reporting by Susan Mathew in Bengaluru;
Editing by Marguerita Choy)
  
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