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MSCI's Latam FX index rises for seventh straight day
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Brazil's Hapvida surges after capital injection
(Updates prices; adds comments, details)
By Shreyashi Sanyal and Ankika Biswas
March 28 (Reuters) - Latin American currencies and
stocks rose on Tuesday as the dollar weakened as easing concerns
around a banking turmoil steered investors back to riskier
assets.
The MSCI's index for Latam currencies rose
1.2%, gaining for the seventh consecutive session and now on
track for its third straight quarterly rise.
Investors drew comfort from the fact that no further
cracks have emerged in global banking in recent sessions,
helping offset concerns over the exposure of Latin American
financial institutions to the current banking turmoil.
"We're approaching levels where we were before the banking stress... it's going to be a bigger test for whether this is real demand or just more of a regular market balance after the volatility episode," said Alejandro Cuadrado, global head of FX strategy at BBVA.
Further, resource-rich Latin American assets have benefited from their high exposure to commodities, prices of which have risen since the beginning of the year.
Brazil's real added 0.8%.
Minutes from Brazil's central bank meeting held last week showed that worsening inflation expectations justified its decision to maintain a hawkish stance towards future steps. This comes after the central bank held the Selic rate at 13.75%, without presenting a concrete sign of eventual monetary easing ahead, contrary to expectations in the market and the government.
"The concern with the de-anchoring of inflation expectations prevailed, and these minutes confirm that BCB does not seem nearly inclined to suggest an imminent easing," said Cassiana Fernandez, head of Latin America economic research at JP Morgan. Chile's peso jumped 1.3%, while Peru's sol firmed 0.1% as prices of their main export, copper, rose.
A rise in oil prices lifted currencies of Mexico by about 0.6%. Stocks in the Latin America surged with the main index jumping 2.2% to a two-week high.
Brazil stocks gained 1.4%, with healthcare company Hapvida Participacoes e Investimentos SA surging 17.6%, after on announcing funding measures backed by its controlling shareholders.
Mexican broadcaster TV Azteca jumped 3.8% following fourth quarter 2022 results. The rebound in Mexico's second-biggest broadcaster comes after a sharp selloff last week after the firm's creditors filed an involuntary petition to place it in U.S. Chapter 11 bankruptcy protection.
Elsewhere, the National Bank of Hungary (NBH) held its base rate at 13%, the highest in the European Union, and said it will need to be kept for a prolonged period.
Key Latin American stock indexes and currencies at 2000 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 971.06 0.73 MSCI LatAm 2144.91 2.22
Brazil Bovespa 101078.41 1.41
Mexico IPC 53279.10 0.81
Chile IPSA 5244.64 -0.26 Argentina MerVal 242502.80 3.749
Colombia COLCAP 1120.82 0.23 Currencies Latest Daily %
change
Brazil real 5.1635 0.82
Mexico peso 18.2202 0.62
Chile peso 796.4 1.26
Colombia peso 4680.02 -0.15
Peru sol 3.7526 0.13
Argentina peso (interbank) 207.8200 -0.18 Argentina peso (parallel) 393 -0.76 (Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru;
Editing by Alexandra Hudson and Marguerita Choy)
