Brazilian real, stocks lead gains among Latin American peers



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Latam stocks up 2.5%, FX gains 1.3%

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Brazil stocks set to rally 13% by end-2023 - poll

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Chile unemployment rate hits 8.0% in quarter through October

(Updates prices)

By Bansari Mayur Kamdar and Devik Jain

Nov 29 (Reuters) - Brazil's resource-heavy main stock index and real led gains among Latin American peers on Tuesday, on boost from a subdued dollar and as prices of their exporting commodities rose on hopes of easing COVID-19 curbs in China post the rare protests.

The MSCI's index for Latin American stocks .MILA00000PUS and currencies .MILA00000CUS jumped 2.5% and 1.3%, respectively.

Brazil's Bovespa stock index .BVSP gained, on a boost from a 5% climb in shares of both mining giant Vale SA VALE3.SA and state-run oil company Petrobras PETR4.SA .

The real BRL= rallied 1.5% as prices of its top export iron ore jumped on top steel producer China's moves to ramp up support for struggling property developers.

The Bovespa has risen 6.5% so far this year, outperforming the 22.6% drop in the broader emerging market .MSCIEF .

Brazil stocks will rally by double-digits through end-2023, despite uncertainty about new government policies as President-elect Luiz Inacio Lula da Silva seeks to balance social priorities and budget constraints, a Reuters poll predicted.

"The case for Brazil outperformance is still intact, but that near-term volatility should be expected," wrote Lawrence Brainard, chief emerging markets economist at TS Lombard in a note, adding that markets have misread Lula's policy priorities and strategy.

"While the extent to which Lula will be successful in pushing through major economic reform is not yet clear, there is widespread support from business and the broader public for addressing the festering fiscal mess."

Reuters reported Brazilian President-elect Luiz Inacio Lula da Silva is expected to tap former Sao Paulo Mayor Fernando Haddad in coming days to be his finance minister.

Lula's silence on the decision has rattled Brazilian markets this month, with investors also worrying about Lula aiming to prioritize social spending over fiscal responsibility that could ultimately force a monetary policy shift.

Emerging market central banks, especially Brazil, had started tightening their monetary policies way ahead of their developed peers. Still, inflation continues to run ahead of their target expectations.

S&P Global Ratings

lowered its 2023 growth forecast for emerging economies

, citing persistent pressures from the Russia-Ukraine conflict, a lingering COVID-19 pandemic and tight monetary policy conditions.

Mexico's peso MXN= and Colombia's peso COP= rose 0.4% and 0.5%, respectively, against the dollar, with stronger crude prices boosting the oil producer's currency.

The United States on Monday threatened legal action against Mexico's plan to ban imports of genetically modified corn in 2024, saying it would cause huge economic losses and significantly affect bilateral trade.

Currencies of the world's biggest copper producers, Chile CLP= gained 1.6%. Chile's unemployment rate hit 8.0% in the August-October period, government statistics agency INE said, stable from the quarter through September.

Meanwhile, sales of Argentina's 2021/22 soybean harvest hit a two-month high after the government instated a preferential exchange rate for soy exports.

Key Latin American stock indexes and currencies at 1929 GMT:

Stock indexes

Latest

Daily % change MSCI Emerging Markets

953.96

2.49 .MSCIEF

MSCI LatAm .MILA00000PUS

2197.96

2.54

Brazil Bovespa .BVSP

111696.62

2.68 Mexico IPC .MXX

50566.31

-1.01 Chile IPSA .SPIPSA

5246.94

0.75 Argentina MerVal .MERV

166455.19

1.325 Colombia COLCAP .COLCAP

1254.41

1.08

Currencies

Latest

Daily % change Brazil real BRBY

5.2836

1.52 Mexico peso MXN=D2

19.2219

0.38 Chile peso CLP=CL

899

1.50 Colombia peso COP=

4806.38

0.50 Peru sol PEN=PE

3.849

-0.43 Argentina peso (interbank)

166.9600

-0.21 ARS=RASL

Argentina peso (parallel)

311

2.25 ARSB=



OLL-Brazil stocks set to rally 13% by end-2023 despite policy
uncertainty



Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; editing by Jonathan Oatis and Nick Zieminski

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