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 0.7% to 30,571 in broad-based gains led by
retailers 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 1%, electronics retailer Grupo
Elektra rose 2.9% and Soriana gained 2.1%.
Brazil's Bovespa rose 1.8% to 59,845 with all sectors tracked
moving 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 of a bear market.
In Sao Paulo Friday, the heavily weighted steel group rose 4%,
with shares of Usiminas up 3.3%. Gerdau (GGB) rose 3.9% and Vale
(RIO), the world's largest iron ore provider, gained 4.5%. Oil
giant Petrobras (PBR) shares rose 1.5%.
The Bovespa's best price performer was home builder MRV
Engenharia e Participacoes as its shares jumped 6.7%.
Brazil's currency, meanwhile, fought off earlier losses to trade
at 1.852 reals per dollar. The currency closed Thursday's session
at 1.861. The real closed Thursday's session down 1% but not before
sending lower by more than 3%. Mexico's currency rose to 12.991, an
improvement from Thursday's close at 13.067.
The Bovespa index and the IPC have 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 is facing a weekly decline of nearly 4%, and
is off nearly 5% for the year. The Brazilian index is down about 6%
for the week, and is down about 13% in 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. The plan involves the government granting
right to the company 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 to vote on the share issuance plan on June 22.
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 2.6%. The iShares MSCI Brazil Index Fund (EWZ) rose
3.5%.
