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EMERGING MARKETS-Latam stocks mixed on'fiscal cliff' uncertainty
December 7, 2012 / 12:05 AM / in 5 years

EMERGING MARKETS-Latam stocks mixed on'fiscal cliff' uncertainty

* "Fiscal cliff" continues to weigh
    * Europe enters picture once more
    * Bovespa flat, Mexico IPC gains 0.41 pct

    By Danielle Assalve
    SAO PAULO/MEXICO CITY Dec 6 (Reuters) - Latin American
stocks ended mixed on Thursday as investors took a wait-and-see
approach to budget negotiations in the United States, but
fretted about the economic crisis in Europe. 
    The MSCI Latin American stock index gained
0.88 percent to 3,633.92, the highest since Nov. 8. 
    But Brazilian stocks were flat on investor concerns over
increased government intervention to boost economic growth,
while "fiscal cliff" negotiations added to the anxiety.
    If U.S. politicians cannot reach a compromise over the
so-called fiscal cliff, it could trigger more than $600 billion
in tax hikes and spending cuts that could push the United States
back into recession.
    "The market is stalled, with investors hoping for a
resolution to the tax gap in the United States," said John Peter
Brugger, an analyst Leme Investimentos. 
    U.S. economic data released on Thursday showed the number of
Americans filing new claims for unemployment benefits last week
fell back to pre-superstorm Sandy levels. 
    Adding to concerns, the European Central Bank on Thursday
said it had considered an interest rate cut before deciding to
keep rates unchanged at their current record lows. 
    The bank forecast gross domestic product could fall 0.9
percent or grow by just 0.3 percent next year, while predicting
2014 growth of between 0.2 and 2.2 percent. 
    The Bovespa ended the day flat at 57,656.42. The index has
risen just 1.6 during 2012, compared with 14.4 percent for
Mexico's IPC.
    Brazil's economy has recovered very slowly from a year of
stagnation, prompting President Dilma Rousseff's government to
intervene in many sectors such as banking and electricity
generation to drive down costs for local manufacturers.
    The government has also unwound some capital control
measures to curb the recent drop in its currency, the real
. A media report published on Thursday said "alarmed"
government and central bank officials are concerned that the
recent depreciation of the country's currency could stoke
    "The government has acted in many sectors and that draws
back not only foreign investments but also financial flows in
local markets," said Álvaro Bandeira, partner at Órama
Investimentos, in Rio de Janeiro.
    "We can't really count on a year-end rally, but there's not
much room for a fall either...The market is in the trenches.
Investors shoot and then run for cover," he added.
    Shares of homebuilders gained following a payroll tax
reduction announced by the government earlier in the week.
Shares of Gafisa SA rose 3.15 percent, also
reflecting a price-target upgrade by Bank of America Merill
Lynch to 5.75 reais. 
    Shares in HRT Participacoes em Petroleo SA rose
11.13 percent after it announced a new discovery of gas in the
Solimoes Basin in Brazil's Amazon region with Anglo-Russian
partner TNK-BP Holding OAO. 
     Mexico's IPC index rose for the fourth straight
session, adding 0.41 percent to 42,589.68. Broadcaster Grupo
Televisa rose 2.26 percent, while retail giant
Wal-Mart de Mexico added 0.28 percent.
    Chile's IPSA index edged 0.23 percent lower.

    Latin America's key stock indexes at 2252 GMT:
 Stock indexes                                      % change
 MSCI LatAm                       3,633.92              0.88
 Brazil Bovespa                  57,656.42             -0.04
 Mexico IPC                      42,589.68              0.41
 Chile IPSA                       4,139.86             -0.23
 Chile IGPA                      20,339.87             -0.13
 Argentina MerVal                 2,450.03             -0.81
 Colombia IGBC                   14,414.84              0.13
 Peru IGRA                       20,192.09             -0.04
 Venezuela IBC                  409,934.97              0.03

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