By Carla Mozee
Chile's equity index outperformed its regional rivals Tuesday,
with the market lifted by strength in resource-related stocks as
copper prices touched a 19-month high.
Chile's IPSA index rose 0.8% to 3,776, and headed toward its
first gain in five sessions.
The index is on track to post a more than 1% decline for the
month, but to rise more than 5% for the first quarter, the fifth
straight quarter of advances.
Among exchange-traded funds, the iShares MSCI Chile Investable
Market Index Fund (ECH) rose 1.4%, its strongest percentage gain
since early March.
Tuesday's rise on the IPSA index was fronted by gains in the
materials group, as it tracked a rise in copper prices to levels
not seen since August 2008.
Copper for May delivery closed higher by 0.8% to $3.56 a pound,
and reached an intraday high of $3.57 a pound. Copper prices are
closely tracked in Chile because the country is the world's largest
exporter of the metal.
The iPath DJ-UBS Copper ETN (JJC) advanced 0.7%, and Chile's
currency climbed to 525.31 pesos per dollar compared with Monday's
close at 529.40 pesos.
Among the resources group, shares of Empresas CMPC, a pulp and
paper producer, rose 0.8%. Wood products maker Masisa shares gained
0.8% and Copec climbed 2%.
Shares of steel and iron ore provider CAP surged 3.8% amid
possible pricing changes in the iron ore market that could result
in higher prices for providers of the steel component.
Investors in the Chilean market earlier Tuesday received a
report from Chile's national statistics agency that the
unemployment rate came in at 8.5% in the December-February period,
compared with a rate of 8.7% in the previous three months. The
Instituto Nacional de EstadÃsticas de Chile, or INE, said 7.38
million people were employed during the most recent period, up from
7.27 million in the year-ago period.
Meanwhile, industrial output rose 0.5% in February, helped by
higher output of durable goods and retail sales. Analysts had
expected a February increase of about 1% on a year-over-year basis,
according to Dow Jones Newswires.
INE said the effects on employment and industrial output from
the magnitude 8.8 earthquake that struck Chile in late February
will be seen in their next reporting periods.
Elsewhere in Santiago trading, shares of diversified
construction firm Besalco rose 1.3% and Salfacorp rose 1%,
extending gains from the previous session after the Chilean
government outlined a $2.5 billion housing-sector plan. The plan is
comprised mainly of subsidies aimed at repairing and reconstructing
dwellings affected by the earthquake.
The program is expected to help 195,950 families, and the first
of the plan's two phases will focus on building emergency housing
through June. The program is expected to conclude in 2013.
The earthquake destroyed more than 81,000 houses, and another
109,000 houses were left with major damage, the government said. A
separate plan for repairing schools, hospitals and other
infrastructure will be released soon, according to various reports.
Chile's government has estimated that the earthquake resulted in
overall damages of $30 billion.
Meanwhile, Brazil's Bovespa index rose 0.1% and appeared poised
to close above 70,000 points for the first time since Jan. 13.
On the economic front, inflation in Brazil as tracked by the
IGP-M price index climbed 0.94% in March, according to the Getulio
Vargas Foundation. The index rose 1.18% in February.
Economists and strategists widely expect quickening inflation in
Latin America's largest economy to prompt the central bank to raise
its key interest rate as early as its meeting in April.
Mexico's IPC was up 5 points at 33,421 while Argentina's Merval
eased 0.2% to 2,429.