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EMERGING MARKETS-Brazilian stocks lead Latam shares higher amid trade optimism

Credit: REUTERS/AMANDA PEROBELLI

Latin American stocks tracked Wall Street higher on Wednesday, with Brazilian shares up more than 1% on heightened possibilities of a rate cut by the country's central bank and on positive outlooks from some firms.

By Susan Mathew

Oct 9 (Reuters) - Latin American stocks tracked Wall Street higher on Wednesday, with Brazilian shares up more than 1% on heightened possibilities of a rate cut by the country's central bank and on positive outlooks from some firms.

MSCI's index of regional shares .MILA00000PUS rose 0.8%, with shares in Colombia .IGBC also up 0.2%, while Mexican shares .MXX were marginally higher.

Optimism stemmed from signs of easing hostility in the U.S.-China trade war just a day before high-level trade talks between the two sides are set to begin.

Reports said China was still open to agreeing to a partial trade deal with the United States, and that Beijing was offering to increase its annual purchases of U.S. agricultural products.

Analysts, however, remained skeptical.

"Even if a partial deal is reached later this week, this will not change our view that the trade talks will eventually break down as China appears unwilling to meet the U.S. core demands," analysts at Capital Economics wrote in a note.

Brazilian shares .BVSP climbed 1.4%, posting their best day in a month. Banco Santander Brasil SANB11.SA rose 3.6% after the lender said it expects to see its loan book grow by more than 10% per year through 2022 and maintain its current profitability ratio at 21%.

Airline Gol GOLL4.SA gained after the carrier said it expects core earnings margin to have been between 29% and 31% in the third quarter.

At the bottom of the index were shares of meat processor JBS JBSS3.SA after U.S. lawmakers sought to bring a probe into its U.S. acquisitions. Food processor BRF BRFS3.SA slipped after it confirmed its plant in Abu Dhabi was being audited and that Saudi Arabia had restricted buying of some of its products.

Brazil's real currency BRL= fell as much as 0.4% before steadying. Official data showed consumer price inflation missed expectations and fell to its lowest in more than a year in September, strengthening expectations of a third interest rate cut this year.

Capital Economics analysts now expect a 50-basis-point (bps) cut in rates this month, as opposed to a previous forecast of a cut of 25 bps.

Similar data out of Mexico, albeit in line with expectations, also fuelled rate cut expectations by the country's central bank.

The Mexican peso MXN= was up 0.2% after two days of gains against the dollar. As hopes of a more amicable trade deal between Washington and Beijing rose, the dollar steadied against a basket of six rivals .DXY, while it climbed against the safe-heaven yen JPY=. FRX/

Elsewhere in the emerging market universe, Turkey's lira TRY= slid 0.5%, breaking through what traders called a key support level of 5.85 against the dollar, after Turkey launched a military operation targeting Kurdish fighters in northeast Syrian.

Key Latin American stock indexes and currencies at 1935 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

993.80

-0.02

MSCI LatAm .MILA00000PUS

2642.74

0.8

Brazil Bovespa .BVSP

101512.97

1.42

Mexico IPC .MXX

42543.84

0.02

Chile IPSA .SPIPSA

5032.56

-0.17

Argentina MerVal .MERV

30405.62

0.49

Colombia IGBC .IGBC

12935.41

0.24

Currencies

Latest

Daily % change

Brazil real BRBY

4.0940

-0.07

Mexico peso MXN=D2

19.5690

0.29

Chile peso CLP=CL

723.5

0.18

Colombia peso COP=

3464.3

-0.47

Peru sol PEN=PE

3.366

0.48

Argentina peso (interbank) ARS=RASL

57.9800

-0.22

(Reporting by Susan Mathew in Bengaluru Editing by Paul Simao)

((susan.mathew@thomsonreuters.com; +91-80-6749-1130))

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


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