EMERGING MARKETS-Latam stocks, FX rise; Argentine stocks scale record high
By Susan Mathew
June 18 (Reuters) - Latin American stocks and currencies surged on Tuesday with a dovish boost from the European Central Bank and positive headlines from the U.S.-China trade tensions boosting sentiment.
MSCI's index of Latin American stocks .MILA00000PUS jumped 2%, while its index of regional currencies .MILA00000CUS rose for the first time in four sessions, up 0.7% as regional currencies firmed against a steady dollar. FRX/
Ahead of a U.S. Federal Reserve policy meeting outcome on Wednesday, when the bank is expected to lay the groundwork for a rate cut, ECB President Mario Draghi hinted at the possibility of new rate cuts.
This, along with news that China and the United States are rekindling trade talks after a lull ahead of a meeting between Presidents Donald Trump and Xi Jinping at the G20 summit later this month, buoyed markets globally. MKTS/GLOB
Regional assets joined the rally with Brazil stocks .BVSP rising 1.6% to hit a three-month high.
Petrochemical company Braskem BRKM5.SA cut early losses to trade 4.7% higher. A Brazilian judge on Tuesday granted bankruptcy protection to the company's controlling shareholder Odebrecht, and included Braskem in a list of subsidiaries that creditors are not allowed to sell shares in.
The real currency BRL= firmed 0.7% ahead of the Brazilian central bank's rate meeting on Wednesday, when it is expected to keep its key lending rate on hold.
Returning from a three-day weekend, Argentine stocks .MERV rose about 2% and scaled an all-time high before trading 0.8% higher, while the currency ARS= rose more than 1%.
Mexican stocks .MXX rose 0.4%, breaking a three-day losing run. The peso MXN= traded steady a day after rating agency Moody's had flagged risks from state oil firm Pemex and unpredictable policymaking by its government.
A rise in crude oil prices helped Colombian assets. The oil- exporting country's currency COP= rose almost 1%, while stocks rose 1.7% to an over four-week high, with state oil firm Ecopetrol ECO.CN up 2.3%. O/R
Copper-exporting Chile's peso CLP= rose after four straight sessions of losses. Copper prices hit three-week highs on Tuesday on trade optimism. MET/L
Santiago-traded stocks rose 0.1%.
Chile President Sebastián Piñera said on Tuesday the government will accelerate a $4 billion infrastructure program this year to revive the country's slow-growing economy. The labor minister, Nicolás Monckeberg, also said the government will push pension reform plans through Congress with "extreme urgency."
Key Latin American stock indexes and currencies at 1939 GMT:
Daily % change
MSCI Emerging Markets .MSCIEF
MSCI LatAm .MILA00000PUS
Brazil Bovespa .BVSP
Mexico IPC .MXX
Chile IPSA .SPCLXIPSA
Argentina MerVal .MERV
Colombia IGBC .IGBC
Daily % change
Brazil real BRBY
Mexico peso MXN=D2
Chile peso CLP=CL
Colombia peso COP=
Peru sol PEN=PE
Argentina peso (interbank) ARS=RASL
(Reporting by Susan Mathew in Bengaluru; editing by Jonathan Oatis)
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