December 19, 2012 / 3:45 PM / 5 years ago

EMERGING MARKETS-Petrobras shares lead Brazil's Bovespa higher

* Gov't says gas prices to increase in 2013
    * Vale shares fall on profit-taking
    * Brazil Bovespa gains 0.44 pct, Mexico IPC drops 0.31 pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, Dec 19 (Reuters) - Brazilian stocks rose on
Wednesday after the government confirmed local fuel prices at
the pump would rise in 2013, boosting shares of heavily weighted
oil firm Petrobras.
    Brazil's benchmark Bovespa index rose 0.44 percent to
60,724.04, on track to close the session at its highest level
since late September.
    Mexico's IPC index and Chile's bourse both
snapped three-day rallies, however, as investors locked in
recent gains.
    Brazil Finance Minister Guido Mantega said on Wednesday that
fuel prices, which are controlled by the government to help
manage inflation, will "certainly" rise in 2013. 
    Preferred shares of state-controlled oil company Petróleo
Brasileiro SA, known as Petrobras, rose 2.4 percent while common
shares added 2.3 percent.
    The company has for years pushed for price increases for
gasoline and diesel because now, to meet growing demand, it is
forced to import some of the fuels at market prices and then
sell them to customers at a loss.
    "This improves the outlook for cash flow at an important
moment, considering (Petrobras) has many investments planned for
the coming years," said Illan Besen, an equities specialist at
ICAP in Rio de Janeiro, of the potential for higher fuel prices.
    Gains in the Bovespa were tempered by a 1.34 percent drop in
preferred shares of iron-ore mining firm Vale SA as
profit-takers sold off the stock following an eight-day rally
that pushed the stock up 12 percent.
    The Bovespa is up nearly 6 percent in December, its best
monthly performance since January, as foreign investors return
to Brazilian stocks.
     Net foreign investor flows into the Sao Paulo stock market
turned positive for the year on Dec. 17, market operator
BM&FBovespa said on Wednesday, fueled by a rise in risk
    "Looking at the balance of risks, it's easier to see what's
going to happen in Brazil in 2013 than in the world as a whole,"
 said Adriano Moreno, an analyst with Futura Corretora in
Salvador, Brazil. "We have room to rise to 62,000 points by
Christmas, with people readjusting their portfolios for next
    Mexico's IPC index snapped a three-day rally, losing
0.31 percent to 43,688.51.
    A technical indicator known as the relative strength index
remained in "overbought" territory, indicating stocks may be due
to fall further in coming sessions.
    Telecommunications firm America Movil, controlled
by billionaire Carlos Slim, fell 0.6 percent, contributing most
to the index's fall, while retailer Wal-Mart de Mexico
 slipped 0.54 percent.
    Chile's IPSA index fell for the first session in
four, losing 0.18 percent to 4,280.69.
    Industrial conglomerate Copec fell 0.8 percent,
while retailer Falabella dropped 0.5 percent.
    Latin America's key stock indexes at 1557 GMT:
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,793.96       0.48       4.82
 Brazil Bovespa             60,724.04       0.44       7.00
 Mexico IPC                 43,688.51      -0.31      17.83
 Chile IPSA                  4,280.69      -0.18       2.47
 Chile IGPA                 20,936.45      -0.13       4.01
 Argentina MerVal            2,861.14      -0.35      16.18
 Colombia IGBC              14,589.50       0.07      15.19
 Peru IGRA                  20,327.48       0.17       4.39
 Venezuela IBC             465,342.84       0.01     297.61

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