By Susan Mathew
May 18 (Reuters) - Latin American stocks and currencies
roared higher on Monday, with Brazil shares rising 3.5% as a
commodity prices surged on hopes of economic recovery as
countries eased pandemic-induced lockdowns.
Encouraging data from a COVID-19 vaccine trial by U.S.
drugmaker Moderna added to the optimism, bolstering
Wall Street's rally.
Despite worrying rises in the number of new cases in
emerging markets, especially Brazil, and simmering U.S.-China
trade tensions, an index of Latam stocks jumped
4.3%. Its currency counterpart surged 1% after
both indexes ended lower last week.
Oil firms Petrobras and Ecopetrol
climbed between 3.1% and 7.2% as crude prices rose,
while iron ore miner Vale rallied 6.3% for its best
day in 10 months.
Currencies of oil exporters Brazil, Mexico and
Colombia firmed between 1.3% and 1.5%, with the Mexican
peso touching a more than four-week high.
Chile, the world's largest producer of copper, saw its peso
climb 1%, while stocks were on track for their
biggest one-day gain in three weeks. Copper prices surged almost
2%.
Outbreak hot-spots such as Italy reopened shops and
restaurants, while New York and Spain plan to lift restrictions
gradually. In Mexico, automotive, mining and construction
sectors will be told in 72 hours if they can resume operations,
the government said.
But the regional picture remained grim, with a central bank
survey showing Brazil's economy is expected to shrink by more
than 5% this year.
The political scenario in Brazil remained precarious too,
with health minister Nelson Teich resigning on Friday, as he and
President Jair Bolsonaro showed themselves increasingly out of
step, with Bolsonaro calling for a rollback of state quarantines
and for the widespread use of unproven drugs, such as
chloroquine, to fight the virus.
"This increases uncertainty about how the pandemic will
develop in Brazil and how it will affect the economy, and the
BRL is therefore likely to remain under depreciation pressure
for the time being," said Commerzbank analyst You-Na Park-Heger.
Teich is the second minister to leave a post in Bolsonaro's
government after Justice Minister Sergio Moro quit last month
over differences with the president.
Argentina's peso marked a fresh low against the dollar
with risk of a sovereign debt default looming. Argentina
received three new counter-offers from creditors late on Friday
with the deadline to restructure $65 billion in foreign debt
lapsing on Friday.
"We believe the authorities will continue to signal progress
in the negotiations, with talks continuing after the
aforementioned deadline, to limit the economic impact of a
default," said analysts at Citi Research.
Key Latin American stock indexes and currencies at 1449 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 910.79 1.07
MSCI LatAm 1607.43 4.32
Brazil Bovespa 80242.13 3.46
Mexico IPC 36506.99 2.29
Chile IPSA 3738.96 3.22
Argentina MerVal 40682.61 3.286
Colombia COLCAP 1068.31 1.38
Currencies Latest Daily %
change
Brazil real 5.7594 1.35
Mexico peso 23.5930 1.42
Chile peso 819.8 0.78
Colombia peso 3858.32 1.20
Peru sol 3.4208 0.44
Argentina peso 67.8100 -0.12
(interbank)
(Reporting by Susan Mathew in Bengaluru; Editing by Dan
Grebler)
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