EMERGING MARKETS-Latam stocks hit 4-mo high on Fed plan, Brazil tax breaks
* U.S. Fed announces aggressive new monetary stimulus * Brazil government extends tax breaks to more industries * Brazil Bovespa gains 3.4 pct, Mexico IPC up 1 pct By Asher Levine and Danielle Assalve SAO PAULO, Sept 13 (Reuters) - Brazilian stocks rose to a more than four month high o n T hursday after the U.S. Federal Reserve announced another round of monetary stimulus and Brazil said it would give more industries payroll tax breaks. The MSCI Latin American stock index stretched a rally into a seventh day, rising 1.83 percent to a more than four-month high. The Fed launched an aggressive monetary stimulus program, saying it will buy $40 billion of mortgage-backed securities per month and likely leave interest rates at current rock-bottom lows until at least mid-2015. Shares gained after the Fed statement as investors stepped up bets that the stimulus would help boost growth in the world's largest economy and lead to more demand for riskier Latin American equities. "The Fed announced very aggressive stimulus," said Pablo Spyer, a director at Mirae Securities in Sao Paulo. "We'll see a big inflow of funds to emerging markets." Shortly after the Fed's statement, Brazilian Finance Minister Guido Mantega announced payroll tax breaks for 25 industries, including wood pulp producers, meat packers and freight transportation. Brazil's Bovespa jumped 3.4 percent to 61,958.12 points, its highest since early May. The Fed's program is expected to weaken the dollar, which could push up the dollar costs of commodities and boost the profits of Latin American raw materials producers. Brazil's state-run oil company Petrobras climbed 4.14 percent while Vale, the world's biggest iron ore producer, gained 2.78 percent. Brazil's bid to extend payroll tax breaks supported gains of about 7 percent in meat exporter JBS and as well as wood pulp producers Suzano and Fibria. Still, analysts said worries about slowing global growth and Europe's debt crisis could continue to weigh on demand for riskier assets such as Latin American stocks. "Despite the gains, it's still early to think about a consistent trend for the market, because there are still other risk events out there, such as a China slowdown and the question of Spain (and Europe)," said Gustavo Mendonça, economist with Saga Capital in Rio de Janeiro. Brazilian logistics company LLX pared losses to 1.26 percent after plunging more than 10 percent earlier in the session after controlling shareholder Eike Batista canceled plans to buy back LLX shares and delist the company. Mexico's IPC index rose 1.01 percent to 40,655.61. Retail giant Wal-Mart de Mexico added 1.52 percent while industrial conglomerate Alfa gained 3.16 percent. Mexico sends 80 percent of its exports to the United States and it could see the most direct benefit in Latin America if the Fed's plan helps boost the U.S. economy. Chile's IPSA index reversed early losses, rising 0.29 percent to 4,184.77 and posting its fifth gain in six sessions as industrial conglomerate Copec rose 0.74 percent. Latin America's key stock indexes at 2100 GMT: Stock indexes daily % year-to- Latest change ate % change MSCI LatAm 3,741.25 1.83 3.86 Brazil Bovespa 61,958.12 3.4 9.17 Mexico IPC 40,655.61 1.01 9.65 Chile IPSA 4,184.77 0.29 0.17 Chile IGPA 20,341.99 0.23 1.05 Argentina MerVal 2,508.71 2.97 1.87 Colombia IGBC 14,335.83 1.27 13.19 Peru IGRA 21,435.23 2.08 10.07 Venezuela IBC 297,072.50 0 153.83
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