MEXICO CITY Dec 27 Latin American stocks rose
on Friday and could be in for a rally based on technical signals
and data that showed stronger flows into funds focused on the
Outflows from Latin American-focused stock funds tracked by
Lipper, a Thomson Reuters company, saw record outflows this
year, and the region's equities could be poised for a rebound.
Emerging market stocks took a beating when the U.S. Federal
Reserve first started talking about cutting its massive stimulus
earlier this year. Now the Fed has signaled it will reduce the
pace of stimulus but keep interest rates low. That may push
investors, flush with cash, back into emerging stocks in the new
year. For related analysis, see
* The MSCI Latin American stock index rose
0.5 percent on Friday, but it is still heading for a nearly 3
percent loss this month and it is down about 15 percent this
year compared to an emerging market index that is down
only about 5.5 percent.
* The deep slump is due to Brazil, where stocks have been
hurt by sluggish growth, high inflation and concerns about a
credit rating downgrade. The Bovespa index hit a four-year low
hit back in July and has since mounted only a tentative rebound.
* Lipper data showed on Thursday that flows into U.S.-based
Latin American focused stock funds rose $29 million in the week
ending Dec. 25, registering only the second weekly inflow since
* Weekly outflows outnumbered inflows more than two-to-one
this year as investors pulled $5.2 billion out of Latin American
funds tracked by Lipper, the biggest yearly outflow recorded.
* Expectations that tighter U.S. monetary policy would draw
global investment out of emerging markets hurt Latin American
stocks this year, but concerns about an economic slump in Brazil
* Brazil's benchmark Bovespa stock index has been
little changed in thin holiday trading since last week. It edged
up on Friday by 0.09 percent to 51,266.56 points. The gauge has
failed to break past a technical resistance level at 51,600
points, but if the Bovespa can advance past it soon, it may rise
* Analysts think Brazilian multinationals and commodities
exporters could benefit from weakness in the real currency that
is expected due to less Fed stimulus. A weak real translates
into higher profits from exports.
* Mexico's IPC index rose 0.5 percent to 42,753.22
percent, peaking past the 42,500 level. The index had already
failed to break decisively through that level on two previous
attempts since the end of November.
* The 42,500 level coincides with the two-thirds retracement
of the IPC's January to June slump. A clean break higher in the
coming sessions could point to another rally of about 7 percent
back to January's record high.