* Citi downgrades Peru to "market weight"
* Window for a recovery Colombian peso fading - JPM
* New Petrobras CEO seeks to maintain previous pricing
policy
* Braskem jumps on M&A speculation
* EM assets set for lift after choppy start to 2021 -
Blackrock
(Updates prices)
By Susan Mathew
April 19 (Reuters) - Peru's sol posted its worst session in
five months on Monday after the first poll ahead of a June
presidential run-off election indicated a socialist win, while
most other Latin American currencies rallied as the dollar
declined sharply.
The sol lost 1% after Sunday poll from Ipsos Peru
showed Pedro Castillo, the surprise winner of the first round
vote earlier this month, in pole position to win the presidency
in June, showing him with 42% support against 31% for right-wing
rival Keiko Fujimori.
"Fujimori's path to bridge the gap will not be easy due to
her high rejection rate. We believe this opens the space for
further negative repricing in Peruvian assets," said strategists
at Citi Research.
"We move Peru back to market weight."
Colombia's peso fell after three straight days of
gains. Ratings agency Fitch on Monday said Colombia's $6.4
billion tax reform, sent to Congress last week, is key for the
country's bonds to retain investment grade.
"Our concern is that the window for a COP recovery is fading
as the debate domestically switches to fiscal reform, amid
investor concerns over the country's twin deficits," analysts at
JPMorgan said in a note.
"If anything, risks are skewed toward the reform being
watered down over the coming month, which will present another
headwind for COP outperformance."
As the greenback decline against most rivals,
Brazil's real gained for a fifth straight session
- its longest winning streak in almost a year, while Mexico's
peso notched three-month highs.
Data on Monday showed Mexico's economy shrank by more than
2% in March, but analysts expect a rebound in subsequent
months.
As copper scaled decade highs, top producer Chile's peso
tacked on 0.4%. Rising copper prices have made Chile's
currency one the best performing Latam units so far this year,
up 1.6% compared to a 6.4% drop for Brazil's real.
The BlackRock Investment Institute said on Monday the
economic restart, stabilising U.S. Treasury yields and
relatively cheap valuations will boost EM assets after a choppy
start to 2021.
With Wall Street's main indexes declining, most Latam
bourses fell with Brazil's Bovespa stocks index breaking
a five-day winning streak.
But oil major Petrobras jumped 6% after its new
chief executive said he sought to maintain policies of the
previous administration, including pricing policy, which
generally won market plaudits.
Brazilian petrochemical producer Braskem rallied
4.7% on speculation of a potential sale of the company.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1349.04 0.03
MSCI LatAm 2410.11 0.21
Brazil Bovespa 120863.38 -0.21
Mexico IPC 48152.41 -1.18
Chile IPSA 4985.67 -0.05
Argentina MerVal 47955.24 0.61
Colombia COLCAP 1311.36 -0.43
Currencies Latest Daily %
change
Brazil real 5.5554 0.53
Mexico peso 19.8387 0.38
Chile peso 699.4 0.64
Colombia peso 3625 -0.64
Peru sol 3.6718 -1.06
Argentina peso 92.9200 -0.12
(interbank)
(Reporting by Susan Mathew and Ambar Warrick in Bengaluru;
editing by Jonathan Oatis and Alistair Bell)