(Updated at 1556 GMT) * Stocks up 0.2%, forex up 0.1% * Peruvian sol falls after economy shrinks * Israel’s Q3 GDP robust despite wrong estimate By Siddarth S November 16 (Reuters ) – Latin American stocks rose on Thursday, lifted by heavyweights Brazilian stocks fell while Peru’s sol fell 1% for a day after the copper-producing country’s economy contracted for a fifth straight month in September. MSCI’s index of Latin American currencies rose 0.1% against the dollar, while regional stocks were up 0.2% by 1556 GMT. Latin American assets enjoyed a strong rebound this week after cooling inflation data led to speculation that the Federal Reserve was done raising interest rates and markets began pricing in rate cuts next year. “When expectations or concerns about further Fed (rate) hikes calm down, when you see some stability in the Treasury market, that’s positive for sentiment in Latin America, and we’ve certainly seen that recently,” said David Rees, senior emerging markets economist at Schroders. “Currently our official number is that the Fed will start cutting rates around mid-year,” Rees added. Brazil’s Bovespa stock index rose 0.7%, while the real gained 0.1%. Shares of Americanas rose 8.8% after the Brazilian retailer reported revised 2021 financial results and 2022 numbers, following the revelation this year of a multibillion-dollar accounting scandal that led to the company filing for bankruptcy. Peru’s sol fell 1.0% after data on Wednesday showed the country’s economy contracted for a fifth straight month in September, well below forecasts. The mining-dependent South American economy has stalled this year partly due to bad weather linked to the El Niño weather phenomenon and social unrest. The Colombian peso also fell almost 1% after the oil exporting country’s economy shrank 0.3% in the third quarter from the same period a year ago. Adding further pressure on the peso, Colombia’s President Gustavo Petro said on Wednesday the country should not maintain its so-called fiscal rule to boost public investment and promote economic recovery, although he acknowledged that such a decision was made by Congress must be. In China, a key market for Latin American countries, new home prices fell for the fourth straight month, pointing to an overall slowdown in the sector that could hurt the country’s overall recovery. “(China’s) domestic prospects are still quite fragile,” Rees added. Global investors expect Argentina to face significant financial woes regardless of who voters elect as the next president on Sunday, as a much-needed fiscal adjustment is likely to trigger even more inflation. Israel’s economy grew solidly, although less than expected, in the third quarter, data showed, before the year was expected to end weakly due to Israel’s war with the Palestinian militant group Hamas. The shekel gained 1.1% against the dollar. Major Latin American Stock Indices and Currencies at 1556 GMT: Stock Indices Latest Daily Percentage Change MSCI Emerging Markets 982.85 -0.07 MSCI LatAm 2451.63 0.16 Brazil Bovespa 124037.36 0.71 Mexico IPC 52572.54 -0.42 Chile IPSA 5706.08 -1.2 Argentina MerVal 615497 .38 -2.203 Colombia COLC` 1107.02 – 0.28 Currencies Latest daily % change Brazilian Real 4.8580 0.05 Mexican Peso 17.2710 0.14 Chilean Peso 879 .4 0.85 Colombian Peso 4074.75 -0.93 Peruvian Sol 3.8239 -1.33 Argentine Peso 353.4500 -0.13 (Interbank) Argentine Peso 930 4.30 (parallel) (Reporting by Siddarth S in Bengaluru; editing by Richard Chang)
