EMERGING MARKETS-Airline Gol boosts Brazil's Bovespa

Wed Dec 26, 2012 11:09am EST

* Gol shares soar on plan to spin off loyalty program
    * Concerns over U.S. fiscal negotiations weigh
    * Brazil Bovespa rises 0.41 pct, Mexico IPC up 0.18 pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, Dec 26 (Reuters) - Brazil stocks rose on
Wednesday, boosted by shares of airline Gol Linhas Aereas SA
, though concerns over U.S. budget negotiations
limited gains.
    Mexico's IPC index snapped a four-session slide,
while Chile's bourse was little-changed.
    Brazil's benchmark Bovespa stock index rose for the
fourth session in five, adding 0.41 percent to 61,258.69 points
but falling short of the three-month high reached at Monday's
close.
    "The Bovespa continues on a gaining trend in the short
term," Itau Corretora analysts wrote in an investor note on
Wednesday, adding that the market should continue toward 65,000
points if it breaks resistance at 63,500.
    Shares of airline Gol skyrocketed on Wednesday, rising more
than 17 percent and contributing most to the index's gains after
the company announced late Friday that it would spin off its
frequent-flier program, known as "Smiles." 
    Brazil's stock market was closed on Monday and Tuesday for
the Christmas holiday.
    Gol received an additional boost after analysts at BTG
Pactual Group upped their recommendation on the shares to "buy"
on Wednesday, saying gains from a recent restructuring looked
"sustainable" in the near term. 
    "(Gol) should get a good price for a Smiles IPO," said   
Illan Besen, an equities specialist with ICAP in Rio de Janeiro.
"(Gol) is going through a restructuring that is starting to show
results, at a time when the stock is still cheap, so it's
natural that we'd see a strong gain like this."
    Ongoing investor concerns over U.S. budget talks weighed on
some of the most widely traded stocks as President Barack Obama
cut short his vacation for a final effort to negotiate a deal to
avert the "fiscal cliff" of tax increases and government
spending cuts set to begin next week. 
    Shares of oil producer Petroleo Brasileiro SA,
known as Petrobras, were down 0.9 percent while state-controlled
lender Banco do Brasil SA shares were down 1.5
percent.
    "The market is still in a holding pattern, waiting for a
fiscal agreement in the United States, and time is running out,"
said Besen, who added that volumes would remain low through the
week as investors leave for vacations. "You can't take a relaxed
break with an event like that still undefined, though." 
    Mexico's IPC index rose 0.18 percent to 43,610.22, as
shares of financial firm Grupo Financiero Inbursa,
controlled by billionaire Carlos Slim, rose 3.76 percent.
    A technical indicator known as the relative strength index
neared "overbought" territory, however, suggesting that gains in
the IPC may be limited.
    Chile's IPSA index was little-changed at 4,295.23
points.
    Shares of Empresa Nacional de Telecomunicaciones SA 
rose 0.32 percent after analysts at BTG Pactual Group reinstated
coverage of the firm on Wednesday with a "neutral"
recommendation. 

    Latin America's key stock indexes at 1517 GMT:
    
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,808.91       0.52       5.19
                                                  
 Brazil Bovespa             61,258.69       0.41       7.94
                                                  
 Mexico IPC                 43,610.22       0.18      17.62
                                                  
 Chile IPSA                  4,295.23       0.06       2.82
                                                  
 Chile IGPA                 21,013.29       0.05       4.39
                                                  
 Argentina MerVal            2,819.30       1.18      14.48
                                                  
 Colombia IGBC              14,589.98      -0.01      15.19
                                                  
 Peru IGRA                  20,312.88       0.03       4.31
                                                  
 Venezuela IBC             465,396.13          0     297.65
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