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Haddad says high interest rate Brazil's main issue
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Chile economic activity beats forecasts in Jan
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Brazil manufacturing activity improves in Feb
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Latam FX up 0.8%, stocks rise 0.5%
(Updates prices, details)
By Amruta Khandekar and Bansari Mayur Kamdar
March 1 (Reuters) - Latin American stocks and currencies
rose on Wednesday as upbeat Chinese data bolstered risk
sentiment, with the Chilean peso leading gains after
better-than-expected economic growth in Chile in January.
China's manufacturing activity expanded at the fastest pace
in more than a decade in February, according to official data,
cheering equity markets hammered in February by concerns about
the U.S. Federal Reserve's monetary tightening lasting much
longer than expected.
MSCI's index for Latin American stocks rose
0.5% by 1915 GMT, after ending February with the biggest monthly
loss in nearly eight months.
The index trailed broader EM stocks , which jumped
2.2% and were poised for their largest single-day percentage
gain in over seven weeks.
Currencies in the region gained 0.8% against
a weaker dollar, with Chile's peso up 2.1% and extending
gains for a second straight day.
Chile's economic activity in January beat market forecasts
and put an end to a negative string of four consecutive monthly
drops, with improved mining results helping the world's largest
copper producer start the year with a positive tone.
Also supporting the peso were copper prices that firmed on
hopes of demand recovery in top consumer China. "High inflation, a very restrictive monetary stance, tighter
global financial conditions and policy uncertainty continue to
be headwinds for activity," Sergio Armella, an economist at
Goldman Sachs, said in a note.
"Still, we remain more constructive on growth than the
central bank (of Chile) ... and see potential upside from the
impact China's reopening could have on Chile via a positive
terms-of-trade shock."
The strong economic data could lead markets to further
discount the odds of a rate cut by the central bank of Chile at
its April meeting, Scotiabank economists said.
In Peru , the second biggest producer of copper, the
sol rose 0.7%, with data showing the Andean country's consumer
prices rose 0.29% in February.
The Brazilian real rose 0.8%, with the country's
manufacturing activity improving moderately in February from
January, according to a report from S&P Global.
Limiting the upside, Finance Minister Fernando Haddad said
that Brazil's high interest rate is the main obstacle to
economic growth.
Mexico's peso rose 0.8% against the greenback.
Omar Mejia, recently appointed deputy governor of Mexico's
central bank, said it could consider slowing the pace of raising
its key interest rate.
Colombia's peso added 0.6%, while stocks in Colombia rose 1.1%. The country's largest investment company
Grupo SURA said net profits rose by 81.9% in the fourth
quarter of 2022 compared to the year earlier period.
Elsewhere, Nigeria's ruling party candidate, Bola Tinubu,
was declared president-elect of Africa's most populous nation
after an election the main opposition parties have disputed.
Key Latin American stock indexes and currencies at 1915 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 985.62 2.24 MSCI LatAm 2197.66 0.53 Brazil Bovespa 103551.40 -1.32 Mexico IPC 53471.15 1.35 Chile IPSA 5376.05 -0.35 Argentina MerVal 248916.74 0.589 Colombia COLCAP 1200.23 1.07 Currencies Latest Daily %
change
Brazil real 5.1959 0.56
Mexico peso 18.1537 0.81 Chile peso 810 2.15
Colombia peso 4827.81 0.60
Peru sol 3.778 0.07
Argentina peso 197.5500 -0.20
(interbank) Argentina peso 371 1.08
(parallel) (Reporting by Amruta Khandekar and Bansari Mayur Kamdar in
Bengaluru; Editing by Shounak Dasgupta and Alexander Smith)
