* Vale gains on bets of favorable court ruling
* Mexican stocks fall off of over three-week high
* Mexico IPC falls 0.9 pct, Brazil Bovespa up 1.2 pct
By Asher Levine
SAO PAULO, April 3 Brazilian stocks bounced up
off a key support level on Wednesday to trade higher, backed by
bets that a legal ruling could throw out some $15 billion in tax
claims on iron miner Vale, while Mexican stocks slumped back
after a recent rally.
Brazil's benchmark Bovespa stock index rose 1.23
percent to 55,562.74 as shares of iron-ore miner Vale SA
climbed nearly 6 percent.
Brazil's Supreme Court on Wednesday put off for a week a
decision on whether Vale must pay an estimated $15.2 billion in
taxes on earnings from its operations abroad. Vale shares gained
on bets that it might win its tax case, said Luciano Rostagno,
chief strategist with Banco WestLB in Sao Paulo.
State-controlled oil producer Petrobras could
also benefit from the ruling, and its stock rose 1.69 percent.
Before Wednesday's rebound, the Bovespa had fallen to near
its lowest level in about eight months due to flagging
confidence in the local economy and worries over government
intervention in the private sector.
"We are near a support level at 55,000 points and, if
external markets remain stable, we could see a rebound here,"
said Joao Pedro Brugger, an analyst with Leme Investimentos in
The amount of short-sales, or bets that Brazilian stocks
would fall, hit a record 89.4 billion Brazilian reals ($44.2
billion) worth of shares at the end of March, financial exchange
operator BM&FBovespa SA said in a monthly report on
Shares of Brazilian homebuilder Gafisa SA jumped
6.67 percent after a local newspaper reported that the
debt-laden company had received four offers for its high-end
Mexico's IPC index fell 0.9 percent to 43,717.57
points, pulling back from a more than three-week high.
Shares declined after data on Wednesday showed U.S.
companies slowed their pace of hiring more than expected, while
another survey showed growth in the U.S. services sector in
March was the slowest in seven months.
"This was a very justified drop. Earnings are coming and in
the case of the United States, we are near record highs, just
around the levels that people see the indexes at year end," said
Gerardo Roman, head of stock trading at brokerage Actinver in
Shares of telecommunications firm America Movil,
controlled by billionaire Carlos Slim, slipped 1.8 percent while
top U.S. cement supplier Cemex shed 3.58 percent.
Still, Friday's key U.S. monthly payrolls report, due on
Friday, is expected to show the economy gaining steam in
Mexico's top trading partner and a strong report could help
stocks climb, traders said.
Chile's IPSA index dropped for the third straight
session, falling 1.11 percent to its lowest since early January
as shares of retailer Falabella lost 3.44 percent.
Latin America's key stock indexes at 2200 GMT:
Stock indexes daily YTD %
Latest % change
MSCI LatAm 3,766.17 -0.04 -0.83
Brazil Bovespa 55,562.74 1.23 -8.84
Mexico IPC 43,717.57 -0.9 0.03
Chile IPSA 4,347.35 -1.11 1.07
Chile IGPA 21,367.58 -0.82 1.41
Argentina MerVal 3,305.97 -1.06 15.82
Colombia IGBC 13,718.90 -2.17 -6.77
Peru IGRA 19,549.08 -0.78 -5.24
Venezuela IBC 632,201.75 0.86 34.10