EMERGING MARKETS-Latam assets start last week of 2023 positively on rate-cut bets, Bovespa at all-time high

Credit: REUTERS/AMANDA PEROBELLI

By Siddarth S and Lisa Pauline Mattackal

Dec 26 (Reuters) - Latin American currencies and stocks entered the last week of the year with vigor as rising oil prices bolstered markets in the region's top crude exporters, while Brazil's Bovespa stock index continued its strong run, setting a fresh all-time high.

The MSCI's index tracking Latin American stocks .MILA00000PUS was up 1.3%, touching its highest level since April 2022, while a basket of regional currencies .MILA00000CUS was up 0.5% against the dollar.

Brazil's Bovespa index's .BVSP rally continued as it touched fresh record highs of 133,491 points after hitting all-time highs last week.

Assets in Latin America were boosted as oil climbed more than 2% to its highest level this month after further attacks on ships in the Red Sea prompted fears of shipping disruptions O/R.

With gains led by its energy-focused stocks, Brazil's stock index was up 0.6% on the day and is on pace for its best year since 2019 with gains of over 21%.

Private economists in Brazil are forecasting a deeper monetary policy easing next year as their inflation expectations accommodate within the central bank's target range, a weekly survey conducted by the monetary authority showed on Tuesday.

"(Brazil's) inflation expectations for end-2024 remain 91bp(basis points) above the target and for 2025/26 remain stuck 50bp above the inflation target 3.0% midpoint, which likely reflects the expectation that the government will not deliver on the announced fiscal targets" Goldman Sachs economists said in a note.

Trading was light following the Christmas holiday.

December has been a cheerful month for Latin American assets, with the stocks and currencies indexes on track for monthly gains of 8% and 2.7% respectively, as the U.S. Federal Reserve's dovish stance followed by a softer U.S. inflation report pushed investor expectations of rate-cuts as early as March.

Argentina's Merval index .MERV dipped 3.7%, while Mexico's benchmark stock index .MXX was up 1%.

Shares of Grupo MexicoGMEXICOB.MX edged up 0.3% after announcing its Transportes unit has acquired 60% stakes in two firms providing maritime transportation services of railroad cars between the United States and Mexico. However, shares of the unit GMXT.MX slipped 0.2%.

Further boosting Brazilian equities, Enauta ENAT3.SA rose 9.5%, hitting six-month highs, after the oil company said on Monday it acquired the entire 23% stake held by QatarEnergy Brasil Ltda in some oil fields in the Campos Basin.

Key Latin American stock indexes and currencies at 2010 GMT:

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

999.41

0.62

MSCI LatAm .MILA00000PUS

2671.04

1.31

Brazil Bovespa .BVSP

133504.74

0.57

Mexico IPC .MXX

57909.16

1.04

Chile IPSA .SPIPSA

6218.05

1.09

Argentina MerVal .MERV

913125.08

-3.727

Colombia COLCAP .COLCAP

1181.28

0.93

Currencies

Latest

Daily % change

Brazil real BRBY

4.8224

-0.03

Mexico peso MXN=D2

16.9577

0.33

Chile peso CLP=CL

889.3

-0.09

Colombia peso COP=

3854.4

1.06

Peru sol PEN=PE

3.6781

-0.14

Argentina peso (interbank) ARS=RASL

806.8500

-0.25

Argentina peso (parallel) ARSB=

975

2.05

(Reporting by Siddarth S and Lisa Mattackal in Bengaluru; Editing by Chizu Nomiyama and Alistair Bell)

((Siddarth.s@thomsonreuters.com;))

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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