EMERGING MARKETS-Brazil stocks rise after rout; real firms after intervention
SAO PAULO, June 12 (Reuters) - Brazil's benchmark Bovespa equities index and real currency both rose moderately on Tuesday as traders saw room to take a breather amid a rocky stretch for Latin America's largest economy.
After an 8 percent fall in the Bovespa over the last five sessions, a slow news day at home combined with mixed political signals abroad resulted in limited buying opportunities.
Traders, however, warned that the rise was likely to be short-lived and was unsupported by fundamentals, with many bracing for cuts to Brazil's 2018 growth forecast for gross domestic product and with no moderate, market-friendly candidate gaining traction in the polls heading into the country's October presidential election.
"There's a clear absence of positive triggers for a buyers' recovery and an upward trend," said Régis Chinchila, an analyst at Rio de Janeiro-based Terra Investimentos.
The Bovespa climbed 0.5 percent in afternoon trade.
Among the biggest gainers were electronics retailers Magazine Luiza SA and Via Varejo SA, which climbed 3.3 percent and 6.8 percent, respectively, as it became clear that the long-term effects of an 11-day truckers' strike in late May would not be severe.
Shares of steelmakers Usinas Siderurgicas de Minas Gerais SA and Cia Siderurgica Nacional SA rose up 3.5 percent and 5.6 percent, respectively, as Brazil's president signed a decree loosening mining restrictions.
Brazil's real, which hit two-year lows in recent sessions before the central bank intervened in the currency market, climbed 0.53 percent against the dollar on Tuesday, trading at 3.70 to 1. That bucked a trend among major Latin American currencies, which generally fell on Tuesday amid expectations the U.S. Federal Reserve could signal two future interest rate hikes at its policy meeting this week.
Traders said the real was supported by the expectation that Brazil's central bank, which said it would offer up to $20 billion in currency swaps through the end of this week, would continue to support the currency.
"The market is still cautious because of the Fed meeting and due to domestic issues, but it remains measured with the central bank acting," said José Carlos Amado, currency trader at Sao Paulo brokerage Spinelli.
The biggest loser among Latin American equities markets on Tuesday was Argentina's Merval index.
Key Latin American stock indexes and currencies at 1736 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 1,139.70 0.02 -1.64 MSCI LatAm 2,501.97 -0.18 -11.37 Brazil Bovespa 72,666.38 0.5 -4.89 Mexico IPC 46,783.25 1.04 -5.21 Chile IPSA 5,538.66 0.31 -0.47 Chile IGPA 27,999.16 0.27 0.07 Argentina MerVal 31,152.70 -1.74 3.62 Colombia IGBC 12,281.52 0.24 8.01 Venezuela IBC 41,824.21 -0.43 3,211.13 Currencies Latest Daily YTD pct pct change change Brazil real 3.7059 0.53 -10.59 Mexico peso 20.6800 -0.39 -4.74 Chile peso 636.2 -0.63 -3.39 Colombia peso 2,858.42 0.15 4.32 Peru sol 3.271 -0.18 -1.04 Argentina peso 25.7900 1.20 -27.88 (interbank) Argentina peso 26.2 -0.38 -26.60 (parallel) (Reporting by Claudia Volante and Paula Arend Laier additional reporting by Gabriela Mello; writing by Gram Slattery editing by Leslie Adler)
