EMERGING MARKETS-Brazil equities steady amid Petrobras, political worries
SAO PAULO, May 30 (Reuters) - Brazil's Bovespa equities index was little changed on Wednesday as a decline in state-run oil company Petroleo Brasileiro SA was offset by gains in some transport and consumer stocks that have plunged in recent weeks.
The index's performance on Wednesday reflects traders' wariness about the resolve and ability of the government to maintain market-friendly policies in the midst of large-scale trucker and oil worker strikes.
Still, deal seeking managed to bring the index into positive territory, after a morning in the red.
The center of attention was Petrobras. Preferred and common shares in the company fell some 3 percent and 1.5 percent, respectively, in morning trade, as workers at the company walked off the job and various media outlets, including Reuters, reported that President Michel Temer may force Petrobras to ditch its market-based fuel pricing system.
They later trimmed those losses - with the common shares turning positive - after Temer's office said he was committed to Petrobras' financial health and would preserve its pricing policies.
Traders in general said they were worried about the waning strength of the already fragile Temer government. On Tuesday, Temer was forced to swat away questions from journalists about the possibility of a military coup.
Market participants are also trying the measure the costs of a 10-day truckers' strike that is now winding down.
"The market remains very fragile," said one Rio de Janeiro-based trader. "Despite improvements, the situation is not resolved, and losses still need to be figured out." The Bovespa, which has fallen some 16 percent since May 16, was up 0.3 percent by early afternoon after falling almost 0.5 percent earlier, amid a generally positive day for equities in Latin America. The country's real currency had fallen 0.29 percent, to 3.75 reais to the dollar.
Losses would have been greater had traders not scooped up stocks that may have been oversold over the last two weeks amid the truckers' protest.
The biggest percentage gainer on the Bovespa was electronics and appliance retailer Magazine Luiza SA, up 4.2 percent, after fears of major supply disruptions subsided. Also gaining was highway operator Ecorodovias, which climbed 3.4 percent, recouping dramatic losses over the last two weeks as politicians lowered toll revenue targets to assuage the protesting truckers.
Key Latin American stock indexes and currencies at 1452 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1111.83 -1.28 -2.78 MSCI LatAm 2545.41 -0.54 -9.51 Brazil Bovespa 75971.14 -0.13 -0.56 Mexico IPC 44564.76 -0.19 -9.70 Chile IPSA 5511.43 0.31 -0.96 Chile IGPA 27888.31 0.21 -0.33 Argentina MerVal 28559.25 0.82 -5.01 Colombia IGBC 12248.37 0.35 7.72 Venezuela IBC 35039.65 0.99 2674.01 Currencies daily % YTD % change change Latest Brazil real 3.7487 -0.29 -11.61 Mexico peso 19.7350 0.47 -0.18 Chile peso 628.45 0.06 -2.20 Colombia peso 2878.29 0.93 3.60 Peru sol 3.269 0.21 -0.98 Argentina peso 24.9250 -0.18 -25.38 (interbank) Argentina peso 25.85 0.00 -25.61 (parallel) (Reporting by Gram Slattery; additional reporting by Paula Arend Laier Editing by Susan Thomas)
