May 10, 2019 / 9:27 PM / 2 months ago

EMERGING MARKETS-Latam stocks hold ground, FX gains ground against tepid dollar

 (Recasts throughout; updates prices, adds market strategist's
quote)
    By Aaron Saldanha
    May 10 (Reuters) - A Latin American stocks benchmark held
ground on Friday, while currencies in Latin America broadly
firmed against a tepid dollar, as investors' exposure towards
riskier assets ticked up amid rising hopes of a U.S.-China trade
deal.
    U.S. Treasury Secretary Steve Mnuchin said there had been
"constructive discussions" between the two countries'
negotiators, supporting general risk sentiment towards Latin
American assets.  
    China imports a large amount of Latin America's resources
exports, leaving the region sensitive to slowing growth in the
world's second largest economy. 
    "We continue to believe a deal will be found, the Chinese
economy will continue to grow around the 6% mark this year,"
said Gary Greenberg, head of global emerging markets at Hermes
Investment Management.    
    MSCI's index of Latin American stocks marked
time on the day and posted a 2.9% decline for the week, during
which time it has been whipsawed by U.S.-China trade ructions. 
    MSCI's Latin American currencies index
gained 0.2% on Friday.
    Mexican stocks gained 0.4%, with lender Grupo
Financiero Banorte SAB de CV tacking on 2.2%. The
peso firmed 0.7%.
    "We expect the central bank to leave the reference rate
unchanged at 8.25%," Banorte Senior Economist Juan Carlos
Alderete and Economist Francisco José Flores Serrano wrote in a
note about next week's Banco de Mexico rate meeting. 
    Brazilian stocks fell 0.6%, amid a slew of earnings
results.
    BRF SA slid 2.8% as the world's top chicken
exporter posted a third straight quarterly loss, burdened by
rising feed costs.
    State-run oil firm Petroleo Brasileiro SA's (Petrobras)
common shares ended flat, while its preferred shares
 fell 0.6% despite firmer Brent crude futures.

    Brazil's national energy council late on Thursday published
updated parameters for an oil auction scheduled for later this
year, including minimum levels of profit-sharing with the
government.
    Vale SA rose 1.9%, as the miner's chief financial
officer said it expects iron ore production at its Samarco joint
venture, shuttered by a 2015 dam burst, to resume in 2020's
second half. 
    It also provided an update on a mine involved in a deadly
dam burst earlier this year.
    Brazil's real weakened 0.3%. Economy Minister Paulo
Guedes said that while support in congress for the government's
flagship pension reform bill is rising, dialogue with lawmakers
is proving problematic.
    Argentina's stocks dived 2.1% as it gave back some
ground gained over the previous two sessions. The peso
firmed, taking advantage of a lack of strength in the dollar.
    
    Latin American stock indexes and currencies at 2012 GMT:
    
 Stock indexes                    Latest        Daily %
                                                 change
 MSCI Emerging Markets               1,033.44      0.49
 MSCI LatAm                          2,656.22         0
 Brazil Bovespa                     94,257.56     -0.58
 Mexico IPC                         43,382.35      0.44
 Chile IPSA                          5,050.57       0.1
                                               
 Argentina MerVal                   33,393.81     -2.13
 Colombia IGBC                      12,661.82      0.68
                                                       
 Currencies                            Latest   Daily %
                                                 change
 Brazil real                           3.9566     -0.33
 Mexico peso                          19.0954      0.00
                                               
 Chile peso                             685.5     -0.15
 Colombia peso                        3,272.1      0.00
 Peru sol                               3.315     -0.06
 Argentina peso (interbank)           44.8000      1.12
                                               
 
 (Reporting by Aaron Saldanha in Bengaluru and Tom Arnold in
London; editing by Grant McCool)
  
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