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Brazil markets slump as pension reform odds fade


Reuters

By Bruno Federowski

SAO PAULO, Dec 7 (Reuters) - Brazilian markets fell on Thursday after President Michel Temer's administration failed to gather enough support from lawmakers to put a pension overhaul plan to a vote.

A senior lawmaker said on Wednesday that the government's coalition expected to have enough votes later that day to pass the bill, which investors see as crucial to curbing public debt.

"The market is anticipating that the pension reform will not be voted this year," said Coinvalores brokerage head of strategy Paulo Nepomuceno.

Delaying the vote on the unpopular measure to 2018 would put it close to next year's elections, a move most investors see as reducing its likelihood of approval.

The Brazilian real weakened 0.14 percent, while the benchmark Bovespa index fell more than 1 percent.

Other Latin American currencies mostly weakened due to expectations that the United States will push through a tax overhaul.

U.S. Senate Republicans agreed to talks with the House of Representatives on sweeping tax legislation on Wednesday, amid early signs that lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed Dec. 22 deadline.

The tax plan could boost economic growth and inflation, prompting the Federal Reserve to raise interest rates at a faster-than-expected pace in coming months. Higher U.S. rates tend to drain funds away from emerging markets.

Key Latin American stock indexes and currencies at 2101 GMT:

Stock indexes

Latest

daily % change

YTD % change

MSCI Emerging Markets

1100.26

-0.08

27.71

MSCI LatAm

2696.37

-1.59

17.06

Brazil Bovespa

72487.46

-1.07

20.36

Mexico IPC

46981.22

0.02

2.93

Chile IPSA

4887.16

-0.02

17.72

Chile IGPA

24616.07

0.01

18.72

Argentina MerVal

26841.50

1.4

58.66

Colombia IGBC

10901.02

0.53

7.63

Venezuela IBC

1335.06

-1.43

-95.79

Currencies

Latest

daily % change

YTD % change

Brazil real

3.2901

-0.14

-1.24

Mexico peso

18.9670

-0.52

9.37

Chile peso

655.6

-0.34

2.30

Colombia peso

3010.2

-0.14

-0.29

Peru sol

3.235

-0.03

5.53

Argentina peso (interbank)

17.2750

-0.12

-8.10

Argentina peso (parallel)

17.83

0.67

-5.66




This article appears in: Stocks , World Markets , Politics


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