EMERGING MARKETS-Latam equities rise as US clinches fiscal deal

Wed Jan 2, 2013 10:04am EST

Related Topics

* U.S. House of Representatives averts 'fiscal cliff'
    * Commodity stocks lifted by appetite for riskier assets
    * Brazil Bovespa up 2.68 pct, Mexico IPC gains 0.96 pct

    By Asher Levine
    SAO PAULO, Jan 2 (Reuters) - Latin American stocks soared on
Wednesday after U.S. lawmakers voted to avert the so-called
"fiscal cliff" of steep tax hikes and spending cuts that
threatened to throw the world's largest economy into recession.
    The MSCI Latin American stock index posted
its biggest daily rise in nearly four months on Wednesday,
adding 2.36 percent to 3,887.26, its highest level since early
May.  
    Shares of the most widely traded commodities firms drove
Brazil's Bovespa to its biggest daily gain in over 3 months,
while Mexico's IPC index rose the most in two weeks.
    Shares rose after the U.S. House of Representatives passed a
bill late Tuesday that will raise taxes on wealthy individuals
and families but preserve tax cuts for middle class Americans.
The compromise relieved investor concerns over an impasse that
could have weighed heavily on global economic growth.
 
    "It's the first trading session of the year and the market
is also doing some portfolio rebalancing, but the rise today is
principally due to the agreement," said Ricardo Zeno, a partner
with AZ Investimentos in Rio de Janeiro.
    Some investors warned that Wednesday's rally may be
short-lived, with other political showdowns on the U.S. budget
due in coming months. 
    "The market wasn't pricing in a failure to strike an
agreement," said Jose Cataldo, a stock trader at Agora Corretora
in Rio de Janeiro. "Considering that ... there are still risks
that will bring volatility, whether it's the debt crisis in
Europe or a slowdown in China or the debt ceiling in the U.S.
that still needs to be voted on." 
     Brazil's Bovespa index rose 2.68 percent to 62,587.86, the 
highest level since mid-September. 
    A technical indicator, known as the relative strength index,
 crossed into "overbought" territory for the first time in over
three months, indicating stocks may be due to fall in coming
sessions.
    Preferred shares of iron-ore mining firm Vale SA 
rose over 5 percent, while those of state-controlled oil
producer Petroleo Brasileiro SA, known as Petrobras,
climbed over 3 percent. 
    The high liquidity of both shares make them favorites among
foreign investors looking for exposure to Brazilian equities and
they tend to rise or fall in line with global risk appetite.
    Shares of homebuilder MRV Engenharia e Participaçoes SA
 fell 2.75 percent after the company said an
affiliated company was on a government list of firms subjecting
employees to slave-like working conditions. 
     Shares of Braskem SA, Latin America's largest
petrochemical company, rose 6 percent after the company said
late Friday that it had sold a water treatment plant for 652
million reais ($319.6 million) in order to concentrate more of
its investments in the petrochemical sector.
    Mexico's IPC index jumped 0.96 percent to 44,123.96
points, a new record high.
    Shares of cement manufacturer Cemex rose 3.78
percent, contributing most to the index's gains, while    
telecommunications firm America Movil, controlled by
billionaire Carlos Slim, advanced 0.67 percent. 
    Chile's IPSA index notched its biggest daily gain in
two weeks, rising 0.62 percent to 4,328.06. 
    Retailers boosted the index, with Falabella adding
1 percent and Cencosud gaining 1.4 percent.
    
    Latin America's key stock indexes at 1433 GMT:
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,887.26       2.36          0
                                                  
 Brazil Bovespa             62,587.86       2.68       2.68
                                                  
 Mexico IPC                 44,123.96       0.96       0.96
                                                  
 Chile IPSA                  4,328.06       0.62       0.62
                                                  
 Chile IGPA                 21,170.55       0.48       0.48
                                                  
 Argentina MerVal            2,942.27       3.08       3.08
                                                  
 Colombia IGBC              14,758.99       0.29      16.53
                                                  
 Peru IGRA                  20,737.80       0.53       0.53
                                                  
 Venezuela IBC             471,698.78       0.06       0.06
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