* Argentine stocks hit record high, peso rises 3.9%
* Brazil's real up 0.6%, fiscal & political woes linger
* Chile central bank minutes on Wednesday eyed
(Adds comments, updates prices throughout)
By Susan Mathew and Shreyashi Sanyal
Sept 13 (Reuters) - Argentine stocks hit an all-time high
and bonds rallied on Monday after primary elections indicated
the conservative opposition might win mid-terms in November,
heralding possibly market-friendly policy changes as the economy
struggles.
The country's benchmark 2035 dollar-denominated
sovereign bond rose as much three points, traders said.
Broad-based gains on benchmark Merval stocks index,
which rose 4.4% were led by an 14% jump in power producer
Central Puerto.
The Argentine peso jumped 3.9% to 178 per dollar,
traders said, while a risk index for the country dropped
sharply.
The opposition led by around five percentage points in the
key province of Buenos Aires, with some 84% of votes tallied in
the populous region, which has been a bastion of support for the
Peronist government under President Alberto Fernandez.
The results suggest a shift to the right in voters'
preferences, and "the market is likely to take a net positive
view ... for they increase the probability of regime change in
2023 and more effective checks and balances until then," said
Goldman Sachs strategists.
But, in the meantime, they warned of risks of a slight shift
to more interventionist and populist policies by Frenandez's
administration to rebuild political support.
The Argentine economy has struggled with runaway inflation
and debt restructuring, and the current government has been
dragging it feet on an International Monetary Fund program.
Most other Latam currencies firmed against the dollar, with
Brazil's real rising 0.6% as political tension
seemed to ebb for now. A protest by Brazilian truckers loyal to
President Jair Bolsonaro had largely fizzled out on Friday, a
relief for industries that feared supply shortages.
Surging inflation has also raised the prospect for another
interest rate hike in Brazil at a central bank meeting next
week.
"Although continued rate hikes are somewhat helpful for BRL,
we don't expect any sustained outperformance while fiscal and
political risk premium remains high," strategists at J.P. Morgan
wrote in a client note.
Stocks in Sao Paulo rallied, with gains being
broad-based. Power utility Eletrobras rose 3.2% after
a state-run company was created to control assets that cannot be
sold in its privatization.
Chile's peso lifted further off three-week lows with
eyes on minutes of the previous central bank meeting due to be
published on Wednesday.
Mexico's peso rose for the 11th session in 12, while
Colombia's peso inched lower.
Key Latin American stock indexes and currencies at 1902 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1301.50 -0.57
MSCI LatAm 2418.19 0.89
Brazil Bovespa 116354.84 1.81
Mexico IPC 51494.89 -0.05
Chile IPSA 4401.52 -1.4
Argentina MerVal 79231.88 4.397
Colombia COLCAP 1310.54 -0.76
Currencies Latest Daily %
change
Brazil real 5.2333 0.62
Mexico peso 19.8860 -0.03
Chile peso 784.9 0.33
Colombia peso 3823.36 0.24
Peru sol 4.1047 -0.35
Argentina peso (interbank) 98.1800 -0.07
Argentina peso (parallel) 178 3.93
(Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Editing by Alistair Bell and Lisa Shumaker)