* Brazilian inflation stays high, sparks rate hike bets
* Mexican builders tumble after Fitch warning on ratings
* Brazil Bovespa up 0.97 pct; Mexico IPC falls 0.59 pct
By Danielle Assalve
SAO PAULO, Feb 22 Brazilian stocks rose off a
three-month low on Friday, but local inflation data added to
concerns that tighter monetary policy could choke a weak
recovery in Brazil, Latin America's biggest economy.
In Mexico, shares of Wal-Mart de Mexico dropped by the most
in seven months to the lowest price since November on concerns
the retailer will see weaker profits, while Mexican homebuilders
sank after Fitch Ratings warned it could downgrade the
companies' debt ratings.
Brazil's benchmark Bovespa stock index rose 0.97
percent to 56,697.06, one day after closing at its lowest level
since late November. Friday's gains ended seven sessions of
losses, but the Bovespa still ended the week down 2 percent -
its fifth losing week in a row.
"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.
Itau Unibanco Holding SA, Brazil's largest
non-government bank, rose 3.24 percent. Higher interest rates
typically result in larger profits for lenders.
Wood pulp exporters Fibria Celulose SA and Suzano
Papel e Celulose SA rose 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 6.48
percent while Fibria rose 4 percent.
BRF Brasil Foods, the world's largest poultry
exporter, gained 5.08 percent after its board nominated retail
tycoon Abilio Diniz as chairman late on Thursday.
Mexico's IPC index fell 0.59 percent. Wal-Mart de
Mexico, the country's biggest retailer, fell 4.17
percent to a three-month low after the company declined to say
how many stores it plans to open this year. Credit Suisse on
Friday recommended selling the stock because profit growth is
expected to slow.
Mexican homebuilders sank after Fitch Ratings said it could
downgrade companies due to cash flow problems and souring
investor confidence. Geo fell 12.75
percent to a more than four-year low while Urbi sank
16.87 percent and Homex lost 3.99 percent.
"The housing sector is going to keep stinking for a while,"
said Gerardo Roman, head of trading at brokerage Actinver in
Chile's IPSA index advanced 0.56 percent as Credito
e Inversiones rose 3.22 percent.
Stock Latest daily % YTD % change
MSCI LatAm 3,809.30 0.54 0.3
Brazil Bovespa 56,697.06 0.97 -6.98
Mexico IPC 43,875.73 -0.59 0.39
Chile IPSA 4,544.45 0.56 5.65
Chile IGPA 22,150.75 0.51 5.13
Argentina MerVal 3,140.38 0.51 10.02
Colombia IGBC 14,859.26 0.77 0.97
Peru IGRA 20,633.63 -0.14 0.02
Venezuela IBC 618,851.13 0.21 31.27