EMERGING MARKETS-Brazil stocks rise on central bank reassurances

Tue Jun 25, 2013 11:41am EDT

Related Topics

* 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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