SAO PAULO, Oct 3 (Reuters) - Brazilian stocks rose on Tuesday as shares of Petróleo Brasileiro SA rallied after a cabinet minister raised the prospect of privatizing the state-controlled oil company. Common shares of Petrobras, as the company is known, rose 3.5 percent to a seven-month high after Brazil's mines and energy minister said in an interview late on Monday that a privatization would be feasible in the long run.
His remarks added fuel to a controversy over state asset sales in Brazil, a key part of President Michel Temer's efforts to increase competitiveness and balance the government's budget. "It's a remote possibility, especially considering that we're approaching presidential elections next year," strategists at Coinvalores brokerage wrote in a client note. "Nevertheless, this should brighten the mood around Petrobras shares, which currently seem too cheap." On Tuesday, Mines and Energy Minister Fernando Coelho Filho said Temer is not planning on privatizing Petrobras, focusing instead on an ongoing plan to sell off state control of power utility Centrais Elétricas Brasileiras SA, or Eletrobras. Preferred shares in Eletrobras were the biggest gainers on Brazil's benchmark Bovespa stock index, which headed for its best daily performance since late August. The Chilean peso led the gains among Latin American currencies, tracking an increase in prices of copper, a key export. Bargain-hunting propped up copper futures this month after it fell nearly 5 percent in September.
Key Latin American stock indexes and currencies at 1720 GMT:
Stock indexes daily % YTD % change change
MSCI Emerging Markets 1096.56 1.25 25.6 MSCI LatAm 2969.37 1.72 24.72 Brazil Bovespa 75696.02 1.8 25.68 Mexico S&P/BVM IPC 50696.25 0.39 11.07 Chile IPSA 5415.47 0.82 30.45 Chile IGPA 27046.50 0.78 30.44 Argentina MerVal 26481.08 0.49 56.53 Colombia IGBC 11102.33 0 9.62 Currencies daily % YTD % change change
Brazil real 3.1447 0.31 3.32 Mexico peso 18.2075 0.12 13.93 Chile peso 632.6 0.92 6.02 Colombia peso 2950.3 -0.04 1.74 Peru sol 3.267 0.18 4.50 Argentina peso (interbank) 17.4050 0.09 -8.79 Argentina peso (parallel) 17.88 0.45 -5.93
(Reporting by Bruno Federowski; Editing by Phil Berlowitz)