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Brazilian stocks were Latin America’s biggest gainers on Monday as sentiment toward emerging markets got a boost from China’s promise of stimulus while the Mexican peso retreated as US President Donald Trump threatened to close the border to stop a caravan of migrants from Central America.
The MSCI index of Latin American stocks rose 0.8 percent, while the wider MSCI emerging market shares index rose about 1.2 percent.
“Markets are in a bit of a state of flux at the moment. It doesn’t take much to scare them. It doesn’t take much to provide relief,” said Christian Lawrence, a senior market strategist with Rabobank in New York.
“It is mostly because of the 4 percent rally in the Shanghai (index) which clearly set the tone,” he said.
Brazil’s benchmark equity index gained 1.6 percent as stocks rose across the board. Vale SA added 3.3 percent, helped by Previ’s chief executive officer saying the Brazilian pension fund would not sell shares in the iron ore miner before year-end.
Petroleo Brasileiro SA, also known as Petrobras, was 2.4 percent higher after the state-run oil firm received an initial payment of 549 million reais ($148.9 million) from a marine engineering group.
Brazil’s real was 0.75 percent firmer against the dollar, with Latin America’s largest economy headed into a presidential election run-off on Sunday.
Presidential front-runner Jair Bolsonaro on Saturday did not rule out keeping well-reputed central bank chief Ilan Goldfajn in the job, despite a report last week that the banker was preparing to depart by the end of the year.
Mexico’s peso weakened 0.67 percent as Trump has threatened to close the US-Mexico border as he complained that Mexican police and military “are unable to stop” the caravan from moving northward.
“If Trump does decide to go down that route, then clearly it poses a risk to Mexico-US relations at time where we are going to be seeing a (presidential) handover in less than two months,” said Rabobank’s Lawrence.
Argentina’s peso firmed about 0.25 percent after the country’s Treasury minister said the government was on track to meet its 2018 year-end spending targets.
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Source: Brecorder
