EMERGING MARKETS-Brazil stocks up as banks rise on rate hike outlook

Fri Feb 15, 2013 10:40am EST

Related Topics

* Interest rate futures yields rise on Mantega comments
    * Brazil's Bovespa up 0.26 pct, Mexico's IPC gains 0.11 pct

    By Asher Levine
    SAO PAULO, Feb 15 (Reuters) - Brazilian stocks rose on
Friday as bets that the central bank would tighten monetary
policy this year buoyed shares of banks, which usually make
larger profits when interest rates are higher.
    Mexico's IPC index stemmed a four-day slide, however,
while Chile's bourse was little changed.    
    Brazil's Finance Minister Guido Mantega on Friday expressed
concern about Brazil's inflation rate, fueling market bets that
the central bank could raise interest rates this year.
 
    Interest rate futures rose sharply higher after Mantega's
comments, with the contract maturing January 2014 
jumping 12 basis points to 7.51 percent. 
    Brazil's benchmark Bovespa stock index rose 0.26
percent to 58,228.96 points.
    Ita├║ Unibanco Holding SA, Brazil's largest
non-government bank, added 3.45 percent, while rival Banco
Bradesco gained 3 percent.
    Analysts cited more favorable conditions for banks under a
higher interest rate scenario, in which they would gain more
from holdings of interest-rate-linked government debt and face
decreasing government pressure to reduce lending spreads.
    "Recent falls in banking shares were also overdone, so we
are seeing some recovery today," said a broker who declined to
be named because he is not authorized to speak on record.
    The index is on track to close the session with its fourth
straight weekly loss and is down nearly 5 percent this year -
compared with a nearly 7 percent gain in the S&P 500 index
 and a 7.5 percent gain in London's FTSE 100 index
.
    "Monetary policy hasn't brought results, inflation is
rising, the government is trying to solve it with interventions
in some sectors, and all that is pushing investors away," said
Joao Pedro Brugger, an analyst with Leme Investimentos in
Florianopolis, Brazil.
    Mexico's IPC index rose for the first day in five,
adding 0.11 percent to 43,927.30.
    Telecommunications firm America Movil, controlled
by billionaire Carlos Slim, rose 0.4 percent, contributing most
to the index's gains, while lender Grupo Financiero Banorte
 added 0.8 percent.
    Mexican economic growth likely increased in the fourth
quarter as healthy internal demand picked up the slack from
cooling exports, according to a Reuters poll. 
    Chile's IPSA index was little changed from
Thursday's close, with a 0.88 percent loss by retailer Falabella
 offsetting a 0.7 percent gain in conglomerate
AntarChile. 

    Latin America's key stock indexes at 1458 GMT:
 Stock indexes                            daily %     YTD %
                                Latest     change    change
 MSCI LatAm                    3,885.97      0.26      2.05
                                                   
 Brazil Bovespa               58,228.96      0.26     -4.47
                                                   
 Mexico IPC                   43,927.30      0.11      0.51
                                                   
 Chile IPSA                    4,606.75     -0.07      7.10
                                                   
 Chile IGPA                   22,393.63     -0.04      6.28
                                                   
 Argentina MerVal              3,305.00      0.03     15.79
                                                   
 Colombia IGBC                14,998.58     -0.26      1.92
                                                   
 Peru IGRA                    21,299.46     -0.45      3.25
                                                   
 Venezuela IBC               579,485.94     -1.65     22.92
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