EMERGING MARKETS-Brazil stocks rise on central bank reassurances
* China central bank signals liquidity risk "under control" * Fed officials calm market fears over stimulus tapering * Brazil Bovespa gains 1.49 pct, Mexico IPC up 0.62 pct By Asher Levine and Lucas Iberico-Lozada SAO PAULO, June 25 (Reuters) - Brazilian stocks gained on Tuesday, after central bank officials in the United States and China reassured investors that they were not about to turn off the flow of liquidity that has supported financial markets. Mexico's IPC index rebounded a day after hitting a near one-year low, while Chile's bourse snapped a four-day slide. The central bank of China on Tuesday calmed investor concerns over a potential banking crisis by signaling that liquidity risk is "under control." China, which is Brazil's top trading partner, is a key market for Latin American raw material exports such as iron ore, soybeans, petroleum and copper. Shares were also buoyed after two officials of the Federal Reserve suggested on Monday that the U.S. central bank's bond-buying program would not be cut back as quickly as markets have priced in over recent days. Brazil's benchmark Bovespa stock index rose its most in nearly two weeks on Tuesday, adding 1.49 percent to 46,652.07 points. "It's a technical rebound we're seeing, as people's fears over reduced liquidity in the United States and China were calmed a bit. But I don't think this is going to be a lasting recovery for the Bovespa," said Rafael Morsch, an economist with Zenith Asset Management in Porto Alegre, Brazil. Shares of the most widely traded commodities exporters and steelmakers led the Bovespa higher. A 5.2 percent rise in shares of OGX Petroleo e Gas Participacoes SA, the oil company controlled by Brazilian billionaire Eike Batista, was the biggest contributor to the index's gains. Shares of MMX Mineracao e Metalicos SA, also controlled by Batista, rose 10 percent following media reports that commodities firm Glencore Xstrata and Dutch trading company Trafigura are in separate talks to acquire a controlling stake in the company. The Bovespa is on track to close June with its worst quarterly loss in more than four years as foreign investors turn away due to concerns over a weak domestic economic outlook and a potential reduction in global liquidity. The index is down more than 17 percent so far in the second quarter, compared with a 1 percent rise in the S&P 500 index . Friday will mark the last trading day in the quarter. "It has a lot of space to fall further because we still have major problems in Brazil and many companies are going to struggle," Morsch said. Mexico's IPC index rose for the second session in three, adding 0.62 percent to 37,750.64. Cement manufacturer Cemex rose 2.9 percent, contributing the most to the index's gains, while lender Grupo Financiero Banorte added 2.2 percent. Chile's IPSA index rose its most in nearly two weeks, adding 0.46 percent to 3,819.68, as shares of regional energy group Endesa Chile advanced 1.36 percent. Latin America's key stock indexes at 1456 GMT: Stock indexes daily % YTD % Latest change change MSCI LatAm 3,017.04 1.64 -21.84 Brazil Bovespa 46,652.07 1.49 -23.46 Mexico IPC 37,750.64 0.62 -13.63 Chile IPSA 3,819.68 0.46 -11.20 Chile IGPA 19,087.28 0.42 -9.41 Argentina MerVal 3,029.53 0.27 6.14 Colombia IGBC 12,573.47 0.20 -14.56 Peru IGRA 15,283.56 0.22 -25.91 Venezuela IBC 976,458.44 0.4 107.12
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