December 4, 2012 / 12:00 AM / 5 years ago

EMERGING MARKETS-Brazil stocks rise to 1-month high, Mexico up

* Brazil homebuilders up on bets for lower interest rates
    * Brazil Bovespa gains 1.27 pct, Mexico IPC up 1.17 pct

    By Michael O'Boyle
    MEXICO CITY, Dec 3 (Reuters) - Brazilian stocks rose on
Monday to their highest in nearly a month, boosted by gains for
homebuilders after weak growth data last week fed bets that
interest rates will remain at record lows for a longer period.
    Brazil's stock market has risen 5 percent off a more then
three-month low last month, and chart watchers said the rebound
has momentum that could carry it further. 
    "The Bovespa could keep going higher into year-end," said
Fanuel Fuentes, a technical analyst at brokerage Monex in Mexico
    Brazil's Bovespa stock index closed just shy of its 50-day
simple moving average. The gauge has struggled to climb above
the measure since falling below it in October. 
    The Bovespa recovered from a fall on Friday to climb
1.27 percent to 58,202.35, its highest since Nov. 7. Latin
America's largest economy posted far weaker than expected growth
numbers for the third quarter on Friday. 
    "When the GDP numbers came out, there was a perception that
one thing the government could do to increase growth is lower
interest rates ... which would positively affect the
construction sector," said Luiz Roberto Monteiro, a broker at
Renascenca Corretora in Sao Paulo.
    Brazil's central bank slashed its benchmark interest rate to
an all-time low of 7.50 percent this year in a bid to revive the
economy after it slumped last year.
    Shares of homebuilder PDG Realty SA added 5.32
percent, contributing most to the index's gains, while rival
Gafisa SA added 6.18 percent. Lower interest rates
encourage more building and home purchases.
    The pace of activity in China's vast manufacturing sector
quickened in November for the first time in 13 months, a survey
showed on Monday, boding well for Brazil's raw materials
    Steel maker Usiminas gained 4 percent while oil
firm Petrobras gained 1.5 percent.
    Electric utility Cesp rose 8.88 percent after its
board decided against seeking a concession renewal that would
have required it to sharply cut rates. 
    Brazil's power generators have been hammered by a government
effort to enforce lower rates as policymakers seek to curb
energy costs and boost growth.
    Also influencing the shares was a media report on Monday
that said Brazil's government could adjust the compensation it
offers to power generators under the concession renewal plan. 
    "We are still going to see a lot of volatility in the
(electric) sector due to the new compensation plans," Monteiro
said, adding that it would take time for the calculations to be
done and the share prices to settle.
    Mexican stocks rose following Saturday's inauguration of
President Enrique Pena Nieto, who has promised to end years of
violence and sluggish economic growth. 
    The IPC index gained 1.17 percent to a six-week high
of 42,323.84, leaving the gauge only 1 percent below the record
high it reached in October. 
    Mexican stocks have led gains among Latin America's main
indexes this year, helped by solid U.S. demand for goods
produced in the region's second biggest economy amid a wider
global slowdown.
    Data showed that factory sentiment rose in November for the
second straight month in a sign the economy may hold up better
than expected into year-end. 
    Monex's Fuentes said further gains could be limited since
stocks look expensive. "Around 43,000 we could see some big
profit taking," he said.
    Shares of Mexican conglomerate Alfa rose 3.36
percent while top retailer Wal-Mart de Mexico rose
2.19 percent to its highest since April, when news of a
corruption probe knocked down shares.
    Chile's IPSA index gained 0.45 percent to 4,158.66
as regional energy firm Enersis rose 2.39 percent. 
    Latin America's key stock indexes at 2140 GMT:
 Stock indexes                    daily %  year-to
                         Latest    change   date %
 MSCI LatAm             3,586.50     0.17    -0.61
 Brazil Bovespa        58,202.35     1.27     2.55
 Mexico IPC            42,323.84     1.17    14.15
 Chile IPSA             4,158.66     0.45    -0.45
 Chile IGPA            20,385.21      0.3     1.27
 Argentina MerVal       2,419.68     0.01    -1.74
 Colombia IGBC         14,268.26     0.73    12.65
 Peru IGRA             20,291.44     1.23     4.20
 Venezuela IBC        407,729.41     0.03   248.38
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