By Carla Mozee
Stocks in Mexico and Brazil rose Friday, with investors hunting
for bargains after six sessions of losses that have held the
countries' key indexes in negative territory for the year.
Mexico's IPC rose 0.9% to 30,629.15, breaking a six-session
losing streak. Mining and finance groups paced gains and retailers
rose after government statistics agency, Inegi, said retail sales
in March rose 2.3% from the year-ago period, above the market
consensus for a rise of 2%.
Wal-Mart de Mexico (WMMVY) rose 0.9%, electronics retailer Grupo
Elektra rose 1% and Soriana gained 3.4%.
Brazil's Bovespa jumped 2.7% to 60,259.33 with all sectors
tracked higher. The index as of Thursday's closing was down 18.2%
from its April 8 closing higher. A slide of 20% from a recent
closing higher is what market analysts generally consider as the
entry point into a bear market.
In Sao Paulo Friday, the heavily weighted steel group rose 5.3%,
with shares of Usiminas up 5.2%. Gerdau (GGB) rose 4.6% and Vale
(RIO), the world's largest iron ore provider, surged 7.4%. Oil
giant Petrobras (PBR) shares rose 1.2%.
The Bovespa's best price performer was paper manufacturer Klabin
(KLBAY) as its shares leapt 10%.
Brazil's currency, meanwhile, fought off earlier losses to end
at 1.856 reals per dollar. The currency closed Thursday's session
at 1.861, finishing that session down 1% but not it slid by more
than 3%. Mexico's currency on Friday rose to 12.962 pesos per
dollar, better than Thursday's close at 13.067 pesos.
The Bovespa index and the IPC had each finished lower in the
previous six sessions, as investors worldwide have been wrapped in
uncertainty and fear about the impact of Europe's debt crisis on
the fragile global economic recovery process.
Mexican monetary policy makers on Friday weighed in on the
issue. The central bank, in a statement outlining its decision to
hold its interest at 4.5%, said that austerity measures being
adopted in euro-zone nations have the potential to cut into growth
and hurt prices for natural resources.
The Mexican index fell 3.7% for the week, and is off 4.9% this
year. The Brazilian index fell 5% for the week, and is down 12%
since the start of 2010.
Pressure on the Bovespa over the course of the year has come
from shares of Petrobras because of uncertainty about a major
capitalization plan for the company. The plan involves the
government granting rights to Petrobras to explore and produce 5
billion barrel of crude in exchange for new shares in the
company.
Petrobras on Friday said it will hold an extraordinary meeting
for shareholders on June 22 to vote on the share-issuance plan.
Back in Mexico, the central bank's decision to leave the key
interest rate unchanged met analyst expectations. The 4.5% rate has
been held at that level since July 2009. Policy makers said in an
accompanying statement that demand from the U.S. for manufactured
goods has been strong, but domestic demand has been soft, the bank
said.
Policy makers kept their 2011 inflation target of 3%.
Among exchange-traded funds, the iShares MSCI Mexico Index Fund
(EWW) climbed 2.8% on Friday. The iShares MSCI Brazil Index Fund
(EWZ) rose 4.3%.
Argentina's Merval finished Friday's session up 1.6% at
2,153.25. For the week, the index fell 4%.
Chile's IPSA was closed for trading Friday for a holiday. It
slipped 1.5% in the shortened week.