Renewable Energy

EMERGING MARKETS-Argentine assets rally on Macri's running mate pick

Credit: REUTERS/Marcos Brindicci

Argentine stocks surged to all-time highs on Wednesday and the peso firmed over 2% as investors cheered President Mauricio Macri's choice of a moderate running mate that could broaden his voter base in the elections to be held later this year.

By Sruthi Shankar

June 12 (Reuters) - Argentine stocks surged to all-time highs on Wednesday and the peso firmed over 2% as investors cheered President Mauricio Macri's choice of a moderate running mate that could broaden his voter base in the elections to be held later this year.

Buenos Aires' main Merval stock index .MERV jumped 6%, rising across the board, while the peso ARS= climbed to over a one-month high against the dollar and over-the-counter bonds RPLATC gained.

In a series of tweets, Macri, a center-right former businessman whose popularity has been hit by a flagging economy and high inflation, said moderate Argentine Senator Miguel Pichetto will run as his vice-presidential candidate.

"While the presidential race is likely to remain tight in the months to come, Pichetto's nomination improves the chances of policy continuity," Morgan Stanley analysts wrote in a client note. "Overall, we expect local assets to remain stable in the near term, as the recent sell-off in rates should help carry to stay supported."

Argentine markets were a bright spot in Latin America, with a broadly firming U.S. dollar adding pressure on the Mexican peso MXN=, which gave back some gains made on Washington's decision to hold off tariffs on Mexican goods.

The MSCI index of Latin American currencies .MILA00000CUS has gained nearly 2% so far in June, with the dollar dented by hopes that the Federal Reserve will cut interest rates to spur global economic growth in the wake of the trade war with China.

However, the greenback on Wednesday held steady after U.S. President Donald Trump expressed optimism over making a trade deal with China, although he said he would hold up a deal unless China agreed to four or five major points. FRX/

Heading into the G20 summit to be held at the end of this month, some profit-taking among emerging markets currencies could be expected, analysts at Citigroup said a note.

Trump has said he is ready to impose another round of tariffs on Chinese goods if no progress is made in talks with Chinese President Xi Jinping at the summit.

Colombia's peso COP= fell 0.26%, its first decline in five days, hit by a slump in oil prices. O/R Chile's peso CLP= also ticked lower as prices of copper, the country's main export, fell. MET/L

Among stocks, Brazil's Bovespa .BVSP fell nearly 1% after hitting 12-week highs in early trade as iron ore and oil majors were hit by falling prices of crude and iron ore, which is used to make steel. IRONORE/

Shares in state-run oil company Petroleo Brasileiro SA PETR4.SA, PETR3.SA fell over 1%, while steelmaker Companhia Siderurgica Nacional CSNA3.SA tumbled nearly 6% after Morgan Stanley downgraded the stock to "equal-weight" from "overweight."

Key Latin American stock indexes and currencies at 1948 GMT:

Stock indexes

Latest

daily % change

MSCI Emerging Markets .MSCIEF

1024.25

-0.74

MSCI LatAm .MILA00000PUS

2772.44

-0.68

Brazil Bovespa .BVSP

97997.50

-0.97

Mexico IPC .MXX

43798.40

0.19

Chile IPSA <.SPCLXIPSA>

5057.11

-0.24

Argentina MerVal .MERV

40630.52

5.96

Colombia IGBC .IGBC

12234.92

-0.71

Currencies

Latest

daily % change

Brazil real BRBY

3.8678

-0.50

Mexico peso MXN=D2

19.2198

-0.49

Chile peso CLP=CL

695.4

-0.39

Colombia peso COP=

3265.63

-0.33

Peru sol PEN=PE

3.329

-0.09

Argentina peso (interbank) ARS=RASL

43.6500

2.43

(Reporting by Susan Mathew in Bengaluru; Editing by Susan Thomas and Leslie Adler)

((susan.mathew@thomsonreuters.com; +91-80-6749-1130; Reuters Messaging: susan.mathew.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Brokers

Latest Renewable Energy Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More