March 6, 2013 / 3:16 PM / in 5 years

EMERGING MARKETS-Brazil stocks rise after Petrobras diesel hike

* Brazil Bovespa up 1.63 pct, Mexico IPC up 0.22 pct
    * Brazil cenbank likely to leave rates at record low
    * Petrobras leads gains on announced diesel price rise

    By Danielle Assalve
    SAO PAULO, March 6 (Reuters) - Brazilian stocks gained on
Wednesday after state-led oil company Petrobras announced a
surprise rise in diesel fuel prices that will help the firm
tackle cash flow problems.
    Stocks around the world rallied on investor euphoria after
the Dow soared to an all-time intra-day high on Tuesday,
helped by bets central banks around the world will keep interest
rates low to spur a global economic recovery.
    Brazil's benchmark Bovespa index rallied 1.63
percent, after closing negative on Tuesday.
    Brazil's central bank is likely to hold interest rates at an
all-time low after markets close on Wednesday, but investors are
looking for clues the bank may raise borrowing costs later this
year to keep a lid on inflation.  
    Shares of both classes of stock in Petroleo Brasileiro SA
led gains on the Bovespa after the company announced late on
Tuesday a 5 percent increase in the price of diesel, Brazil's
most-used motor fuel. 
    "That was really positive because the market has ruled out
additional fuel price hikes for 2013," said João Pedro Brugger,
an analyst at Leme Investimentos in the southern city of
Florianópolis. "The announcement took the market by surprise." 
    Preferred shares, the most common traded class of
stock, rose 5.86 percent while common shares jumped
12.14 percent to 15.98 reais, posting their highest level in a
month and biggest daily gain since Nov. 2007.
    "Any increase in the price of diesel or gasoline is
extremely positive for Petrobras," said Oswaldo Telles, an
analyst at Espírito Santo Investment Bank in a report. "It's a
direct increase in revenue without any additional costs."
    Further boosting gains in Sao Paulo, bourse operator
BM&FBovespa SA rose 1.42 percent after saying on
Tuesday it would cut trading fees and review custody pricing in
preparation for more foreign rivals to enter the exchange. 
    Though Mexico's bourse gained, shares in Wal-Mart de Mexico
, the country's biggest retailer, limited gains.
They fell 0.4 percent the day after the company reported sales
were down 1.9 percent in February. 
    Mexico's IPC index was up 0.22 percent at 44,113,
while Chile's IPSA index fell 0.51 percent to 4,546.24.
    Latin America's key stock indexes at 1500 GMT:
 Stock                       Latest      daily %     YTD % change
   indexes                               change      
 MSCI LatAm                  3,845.35    0.97        0.28
 Brazil Bovespa              56,863.08   1.63        -6.71
 Mexico IPC                  44,113.64   0.22        0.93
 Chile IPSA                  4,546.24    -0.51       5.69
 Chile IGPA                  22,210.13   -0.39       5.41
 Argentina MerVal            3,227.49    1.07        13.08
 Colombia IGBC               14,629.05   -0.09       15.50
 Peru IGRA                   20,393.81   -0.26       -1.14
 Venezuela IBC               618,486.75  -0.05       31.19

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