July 26, 2012 / 9:58 PM / 7 years ago

EMERGING MARKETS-Draghi's pledge boosts Latam stocks

* Draghi says ECB will act to save euro
    * Banks lead Brazil's Bovespa higher
    * Bovespa up 2.65 pct, Mexico IPC gains 1.34 pct

    By Danielle Assalve and Rachel Uranga
    SAO PAULO/MEXICO CITY, July 26 (Reuters) - Latin American
stocks gained their most in nearly two weeks on Thursday after
European Central Bank President Mario Draghi pledged to do
whatever was necessary within the bank's mandate to protect the
euro zone from collapse.
    The MSCI Latin American stock index snapped
a four-day slide, rising 2.55 percent to 3,522.54.
    Banks led gains on Brazil's Bovespa index while
shares of telecommunications firm America Movil drove
Mexico's IPC index biggest gain this month.
    ECB President Mario Draghi calmed investor fears over a
worsening euro zone debt crisis by signaling that the bank would
take action to help lower borrowing costs in the region,
especially for troubled nations Spain and Italy. 
    "Draghi's comments gave support to the stock markets today,
but I think it's just a temporary relief in a moment in which we
have seen only bad news," said Marcelo Varejao, analyst with
Socopa brokerage in Sao Paulo. 
    "Tomorrow we will have important data coming from US, the
GDP, and it should have impact on the market," he said.
    Brazil's benchmark Bovespa stock index reversed four
days of losses, rising 2.65 percent to 54,002.72.
    Bank stocks led gains, with shares of state-controlled
lender Banco do Brasil up 6.96 percent and those of
Itaú Unibanco, Brazil's largest non-government bank,
up 2.76 percent.
    Central bank data on Thursday showed that private-sector
lenders have been putting the brakes on credit disbursements to
arrest a surge in delinquencies. 
    Preferred shares of mining company Vale added
0.77 percent after the company said its low-cost production
model would help shield it from a drop in metals demand as the
commodity consumer giant China faces a slowdown. A day earlier
the company reported its worst earning results in two years.
    Shares of Fibria, the world's largest producer of
eucalyptus pulp, leapt 7.54 percent after the company posted
better-than-expected second-quarter results on Thursday.
    Mexico's IPC index notched its biggest gain in over a
month, rising 1.34 percent to 40,977.32.
    Telecommunications firm America Movil, controlled
by billionaire Carlos Slim, rose 2.1 percent, contributing most
to the index's gains.  The company was expected to post
second-quarter results after market close on Thursday.
    Mexican stocks are up over 10 percent in the year to date as
investors increasingly turn away from equity investments in
other developing economies such as Brazil, where stocks are down
nearly 6 percent.
    "The Mexican market isn't cheap. It's more like investors
are putting money into Mexico because other (emerging) markets
aren't doing well," said Pablo Riveroll, director of analysis at
brokerage Actinver in Mexico City. "And there's optimism that
the new government will pass reforms and this is provoking
(hope) that there will be more growth in Mexico."
    Chile's IPSA index fell 1.29 percent to 4,235.79,
dragged down by shares of energy company Enersis, which
plunged 12.98 percent a day after it announced it will ask its
shareholders to approve a capital increase of up to $8.02
    Latin America's key stock indexes at 2106 GMT:
 Stock indexes                              daily %  year-to-d
                           Latest            change       te %
 MSCI LatAm                     3,522.54       2.55      -2.21
 Brazil Bovespa                54,002.72       2.65      -4.85
 Mexico IPC                    40,977.32       1.34      10.52
 Chile IPSA                     4,235.79      -1.29       1.39
 Chile IGPA                    20,498.79      -0.95       1.83
 Argentina MerVal               2,433.29       1.43      -1.19
 Colombia IGBC                 13,489.24       0.87       6.50
 Peru IGRA                     19,674.23       0.66       1.03
 Venezuela IBC                244,443.69       0.02     108.86
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