EMERGING MARKETS-Mexico stocks rise to record high, Brazil dips

* Banco do Brasil down on possible Votorantim buy
* Brazil Bovespa down 0.38 pct, Mexico IPC up 0.6 pct

By Jean Arce
MEXICO CITY, Jan 18 (Reuters) - Mexican stocks rose to a
record on Friday, tracking gains in U.S. markets, while equities
in Brazil slipped on declines in iron miner Vale and state-run
bank Banco do Brasil.
Mexico's IPC index added 0.6 percent to 45,212.53
points, an all-time high close.
A better-than-expected quarterly profit at bank Morgan
Stanley helped drive U.S. stocks higher, but a weak outlook from
tech heavyweight Intel kept investors cautious. Analysts noted
Mexican stocks could be vulnerable to profit taking next week.
"If you take out the financial sector, reports have really
been coming in below estimates," said Carlos Hermosillo, a stock
analyst at Banorte-IXE in Mexico City.
"We think next week the market could move sideways, or even
have a bit of a pullback, a small one, but still a pullback," he
said.
Mexican stocks were one of the best performing emerging
market assets last year, with a nearly 18 percent gain as solid
U.S. demand helped shield Mexico from sluggish growth around the
world. Mexico's IPC has risen more than 3 percent this year.
Growth in Mexico is expected to slow from around 3.9 percent
last year to 3.5 percent this year, according to the government.
Inflation has fallen back from a 2-1/2 year high in
September, and on Friday Mexico's central bank said it could cut
borrowing costs if inflation keeps cooling in order to help
boost growth.
Mexican retailer Chedraui added 1.12 percent
while industrial conglomerate Alfa rose 2.94 percent.
Brazil's benchmark Bovespa stock index dipped 0.38
percent to 61,956.14 as shares in iron miner Vale
fell 1.38 percent.
Brazilian stocks have lagged the gains seen in Mexico and
Colombia as the region's biggest economy struggles to mount a
recovery from a slowdown last year.
"The fact is that investors are still very cautious," said
Clodoir Vieira, chief economist at brokerage Souza Barros.
State-controlled lender Banco do Brasil fell
2.28 percent after the company said in a securities filing on
Friday that it is considering boosting its stake in Banco
Votorantim SA.
"It's a short-term reaction as the market prices in the
ultimate cost of this purchase to the bank and the effect on its
cash position," said Gillmor Monteiro, an investment manager
with Intrader in Sao Paulo.
Shares of meatpacker JBS SA added 3.95 percent
after analysts at BTG Pactual Group said the company's U.S. beef
operations could post better-than-expected profit margins after
agribusiness giant Cargill decided to idle one of its
beef processing plants.
Chile's IPSA index rose for the third straight
session, adding 0.74 percent as energy group Enersis rose 1.79
percent.

Latin America's key stock indexes at 2150 GMT:

Stock indexes daily % YTD %
change change
Latest
MSCI LatAm 3,936.69 -0.08 3.66

Brazil Bovespa 61,956.14 -0.38 1.65

Mexico IPC 45,212.53 0.6 3.45

Chile IPSA 4,528.45 0.74 5.28

Chile IGPA 22,030.33 0.64 4.56

Argentina MerVal 3,197.35 0.9 12.02

Colombia IGBC 14,793.71 0.48 0.53

Peru IGRA 21,666.72 -0.44 5.03

Venezuela IBC 485,661.3 0.27 3.02