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Latin America stocks rise to near three-week high as Brazil, Mexico gain

Latin America stocks rise to near three-week high as Brazil, Mexico gainLatin American stocks rose on Monday to near three-week highs on strong gains in Brazil and Mexico and some currencies in the region firmed as the dollar softened due to uncertainty around the US mid-term elections.

Gains in benchmark equities in Mexico and Brazil pushed the MSCI index of Latin America stocks up 1.9 percent, while MSCI’s index of currencies in the region rose 0.25 percent.

Concerns that a strong showing by Democrats on Tuesday would hinder US President Donald Trump’s agenda have played into the dollar’s weakness.

Brazil’s real fell against the greenback but the Bovespa stock index rose 1.3 percent on broad-based gains.

Market-friendly President-elect Jair Bolsonaro softened his view against China, an important destination of Brazilian resource exports, in a television interview, saying China is welcome to invest in Brazil.

He also said that he would propose new reform of the pension system, a much anticipated move, at the start of his government.

Local Mexican traders attributed a 3 percent gain for the main index to investors returning to buy sold-off stocks at “interesting valuations”.

The country’s benchmark closed at a more than two-year low last Tuesday, not long after a decision by incoming Mexican President Andres Manuel Lopez Obrador to scrap a new airport for Mexico City raised doubts among investors about his market friendliness.

The peso started this week by firming about 0.8 percent.

“I think the market is giving (Lopez Obrador) the benefit of the doubt,” said Christian Lawrence, a senior market strategist with Rabobank.

Chile’s peso firmed to two-week highs after data showed economic activity rose in September.

Argentina’s stock index was little changed while its peso weakened about half a percent.

Copyright Reuters, 2018

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Source: Brecorder

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