EMERGING MARKETS-Brazil stocks snap slide, but inflation weighs

Fri Feb 22, 2013 10:38am EST

Related Topics

* German business morale raises outlook for global recovery
    * Brazilian inflation stays high, sparks rate hike bets
    * Brazil Bovespa up 0.3 pct, Mexico IPC falls 0.4 pct

    By Danielle Assalve
    SAO PAULO, Feb 22 (Reuters) - Brazilian stocks snapped a
seven-day slide on Friday, rebounding on upbeat business
confidence in Germany, although local inflation data added to
concerns that tighter monetary policy could choke a weak
recovery in Latin America's biggest economy.
    Mexico's IPC index fell 0.4 percent, slipping for a
third straight day, while wood pulp stocks helped lift Chile's
bourse 0.3 percent. Brazil's benchmark Bovespa stock
index rose 0.3 percent to 56,293.61, after bouncing off
a three-month low in the prior session. 
    German business morale rose the most in over two years in
February, data showed on Friday, reinforcing signs of a solid
rebound in Europe's largest economy after a rough end to 2012.
 
    "Today you're seeing a lot of stocks recovering after
falling a lot, but I don't consider it a sustainable trend,"
said Marcelo Varejao, analyst at brokerage firm Socopa Corretora
in Sao Paulo. "Foreign investors still have the impression the
government let inflation get out of control, which is going to
limit further gains."
    Inflation in Brazil slowed less than expected through
mid-February, government data showed on Friday, leading traders
to step up bets that the central bank could raise interest rates
later this year. 
    Gains on the Bovespa index were topped by wood pulp
exporters Fibria Celulose SA and Suzano Papel e
Celulose SA after Suzano said it would raise wood
pulp prices by $20 per tonne beginning in March.
    The news added to signs of rising demand for Brazilian pulp
from China and other emerging markets in the midst of a solid
earnings season for the industry. Suzano shares jumped 5 percent
while Fibria rose 4.2 percent. 
    BRF Brasil Foods, the world's largest poultry
exporter, also gained 4.2 percent after its board nominated
retail tycoon Abilio Diniz as chairman late on Thursday.
 
    Investors took the nomination as a good sign for BRF, said
Felipe Rocha, an analyst at the Omar Camargo brokerage, after
Diniz helped turn Grupo Pão de Açúcar into Brazil's
biggest retailer. Rocha said the news also fed speculation that
Diniz would move more of his fortune from Pão de Açúcar into BRF
shares, which he began buying in recent months. 
    Mexico's IPC index fell 0.4 percent as the country's
biggest retailer, Wal-Mart de Mexico, fell more
than 3 percent to a three-month low. The company laid out
capital spending plans on Thursday without saying how many
stores it plans to open this year. 
    Chile's IPSA index advanced 0.3 percent to 4,532.60,
boosted by major wood pulp exporters. Wood and pulp producer
Empresas CMPC SA rose 0.8 percent while rival Empresas
Copec SA gained 0.6 percent.
    
 Stock indexes                               daily %      YTD %
                                Latest        change     change
 MSCI LatAm                      3,792.33       0.09      -0.24
                                                      
 Brazil Bovespa                 56,293.61       0.25      -7.64
                                                      
 Mexico IPC                     43,944.78      -0.43       0.55
                                                      
 Chile IPSA                      4,532.60        0.3       5.38
                                                      
 Chile IGPA                     22,096.50       0.26       4.87
                                                      
 Argentina MerVal                3,148.18       0.76      10.30
                                                      
 Colombia IGBC                  14,825.29       0.54      17.05
                                                      
 Peru IGRA                      20,611.26      -0.25      -0.09
                                                      
 Venezuela IBC                 618,744.56       0.19      31.25
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