EMERGING MARKETS-Brazil stocks rise on China factory pickup

Fri Dec 14, 2012 11:45am EST

* Chinese manufacturing grows at fastest pace in 14 months
    * Lingering U.S. budget fears drive Wall St down
    * Brazil Bovespa gains 0.5 pct; Mexico IPC down 0.1 pct

    By Danielle Assalve
    SAO PAULO, Dec 14 (Reuters) - Stocks in Brazil gained on
Friday on a surge in factory activity in China, but uncertainty
over the outcome of U.S. budget negotiations kept other Latin
American markets in check.
    The benchmark MSCI Latin America stock index 
hovered around the level of 3,700 points following a four-week
rally.  
    In Brazil, the benchmark Bovespa index rose a half
percentage point, led by a 2.3 percent jump in shares of
iron-ore giant Vale, as data showing that China's
vast manufacturing sector expanded in December at its fastest
pace in 14 months supported the outlook for commodities prices.
 
    But the Chinese data failed to spur gains in other markets.
Mexico's IPC index lost 0.1 percent, while Chile's IPSA
 and IGPA indexes edged up 0.1 percent.
    "The Chinese data encouraged investors a little, but risk
aversion still prevails," said Eduardo Velho, chief economist
with Planner brokerage in Sao Paulo.
    "Investors will likely remain cautious while there are no
clear signs of progress in the negotiations to avoid the 'fiscal
cliff' in the United States," he added.
    Frustration over lack of progress in U.S. budget
negotiations has driven investors increasingly to the sidelines
in the past few days. 
    They fear that growth in the United States, the world's
largest economy, could be derailed next year if U.S. lawmakers
fail to agree on a plan to avoid the "fiscal cliff" of steep
spending cuts and tax hikes that are scheduled to begin to take
effect in 2013.
    Encouraging global economic data in the past few days
supported recent market gains, but was not enough to spur a
rally as risk aversion grows across the board.  

    
    Latin America's key stock indexes at 1603 GMT:
    
 Stock indexes                      daily %    YTD %
                         Latest      change   change
 MSCI LatAm               3,729.94     0.18     3.36
                                             
 Brazil Bovespa          59,617.35     0.51     5.05
                                             
 Mexico IPC              42,948.29    -0.13    15.83
                                             
 Chile IPSA               4,237.62     0.16     1.44
                                             
 Chile IGPA              20,749.85     0.16     3.08
                                             
 Argentina MerVal         2,669.47     2.27     8.40
                                             
 Colombia IGBC           14,553.56    -0.27    14.91
                                             
 Peru IGRA               20,115.20    -0.22     3.30
                                             
 Venezuela IBC          473,170.03        0   304.29
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