SAO PAULO, June 6 (Reuters) - Brazil's real currency hit a new two-year low on Wednesday, even as its Latin American peers gained against a weakened dollar, underlining the level of investor concern for a country coming off a massive truckers' strike and heading toward an unsettled election.
Brazilian equities and the real have had a tough few weeks after a truckers' protest hit all sectors of the economy, while increasing state intervention in state oil major Petroleo Brasileiro SA underlined the weakened position of the market-friendly government.
A poll released on Tuesday heightened investors' concern about general elections in October. It showed right-winger Jair Bolsonaro and leftist Ciro Gomes as the front-runners, while Geraldo Alckmin and Joao Doria, relative centrists who would be welcomed by investors, lagged.
"Clearly, the mood has changed," said Flavio Serrano, a senior economist at Haitong Banco de Investimento in Sao Paulo. "There's a negative outlook on Brazil, with regard to the political situation and the economy." Brazil's real had fallen 0.38 percent by late morning, trading at 3.82 reais to the dollar, its lowest level since March 2016. The country's benchmark Bovespa index fell as much as 1.5 percent, by far the biggest loser in the region, with losses well spread across sectors.
Shares in food processor BRF SA fell some 2.2 percent, shedding recent gains, after BRF and competitor Minerva SA denied recent reports they were planning a merger.
Among the major gainers in Latin American currency markets on Wednesday was the Mexican peso, which rose 0.68 percent, as traders took a breather after rocky North American Free Trade Agreement (NAFTA) news in recent weeks sent the currency skidding.
Key Latin American stock indexes and currencies at 1512 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1150.40 0.52 -1.21 MSCI LatAm 2509.13 -1.07 -10.32 Brazil Bovespa 75709.35 -1.22 -0.91 Mexico IPC 45210.26 0.18 -8.40 Chile IPSA 5510.19 -0.23 -0.98 Chile IGPA 27883.73 -0.16 -0.35 Argentina MerVal 30536.97 0.59 1.57 Colombia IGBC 12345.11 -0.35 8.57 Venezuela IBC 37879.32 0.52 2898.82 Currencies daily % YTD % change change Latest Brazil real 3.8240 -0.38 -13.36 Mexico peso 20.3100 0.68 -3.01 Chile peso 628 0.64 -2.13 Colombia peso 2825.73 0.93 5.53 Peru sol 3.26 0.25 -0.71 Argentina peso 24.9100 0.20 -25.33 (interbank) Argentina peso 25.65 0.97 -25.03 (parallel) (Reporting by Gram Slattery and Claudia Violante; editing by Jonathan Oatis)