April 10, 2013 / 11:40 PM / 5 years ago

EMERGING MARKETS-Brazil stocks rise tempered by Supreme Court ruling

* Chinese import data beats expectations in March
    * Brazil March inflation rises less than expected
    * Supreme Court decision in Brazil hurts Vale shares

    By Roberta Vilas Boas
    SAO PAULO, April 10 (Reuters) - Brazilian stocks rose on
Wednesday, boosted by strong Chinese trade data and slower than
expected March domestic inflation figures, but a Supreme Court
decision that partially ends the double taxation of foreign
units dented iron ore miner Vale.
    Other Latin American stocks also rose. Mexico's IPC index
 touched its highest level since February, while Chile's
bourse gained for the third straight day.
    Brazil's benchmark Bovespa stock index rose for the
fourth straight session, adding 0.49 percent to 56,186.56.
    Early trading was boosted by data that showed March import
growth in Brazil's No.1 trade partner China far exceeded
    China is a key purchaser of Latin American commodities
exports such as iron-ore, soy, copper and petroleum.
    Local shares were also supported by Brazilian inflation
data, which showed prices rising slightly slower than expected
in March. Analysts said that could ease pressure on the central
bank to raise interest rates at its policy-setting meeting next
    Nonetheless, the split Supreme Court decision, which puts a
partial end to the double taxation of Brazilian companies
operating abroad, may fail to resolve a dispute over billions of
dollars in back taxes on Vale and other Brazilian
    Vale shares eventually fell on the news, losing
3.46 percent, as investors worried the ruling would not free it
of about $15 billion in back tax assessments - a bill 15 percent
larger than the company's average annual profit for the last
three years.
    Nonetheless, the ruling confused investors and analysts, who
decided Vale lost out under terms that seemingly appeared to
benefit the world's largest iron ore miner. 
    "Apparently the market did not like it," said Alvaro
Bandeira, a partner at Orama Investimentos in Rio de Janeiro.
"At first it rose, and then fell sharply. Analysts are stopping
to do the math right now." 
    Mexico's IPC index added 0.93 percent to 44,380.83. 
    Shares of bottling group Femsa rose 2.47
percent, contributing most to the index's rise, while chemical
producer Mexichem lost 2.49 percent. 
    Chile's IPSA index gained for the third straight
day, adding 0.13 percent to 4,353.61 as shares of bank BCI
 gained 3.13 percent.
    Latin America's key stock indexes at 2253 GMT:
 Stock indexes                                      % change
 MSCI LatAm                          3,870.63           0.76
 Brazil Bovespa                     56,186.56           0.49
 Mexico IPC                         44,380.83           0.93
 Chile IPSA                          4,353.61           0.13
 Chile IGPA                         21,354.78           0.12
 Argentina MerVal                    3,462.73          -0.34
 Colombia IGBC                      13,731.01           0.21
 Peru IGRA                          19,389.54          -0.54
 Venezuela IBC                     637,064.75           0.49
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