LATIN AMERICAN MARKETS: Brazil Up As Energy Prices, GDP Outlook
Rise
By Carla Mozee
LOS ANGELES (MarketWatch) -- Equities across Latin America rallied Monday,
with a surge in resource-related stocks and an improved outlook for economic
growth allowing Brazil's benchmark to jump nearly 3%.
Brazilian, Mexican, Chilean and Argentine stocks climbed alongside those on
Wall Street, where blue chips rose to their highest levels of 2009, drawing
support from industrial and material issues. The Dow Jones Industrial Average (
DJI) jumped 192 points to 10,213 in afternoon trade.
"Emerging market assets were back in favour at the start of the week, helped
by a combination of firmer stocks, rising commodity prices and a weaker [U.S.
dollar]," said currency strategists at RBC Capital Markets in a note to clients
Monday.
Brazil's Bovespa climbed 2.7% to 66,214 in a broad-based rally that recouped
its loss of 0.5% on Friday. In Sao Paulo, shares of oil giant and market
heavyweight Petroleo Brasileiro (PBR) rose 2.4% as crude-oil prices rose nearly
3% to $79.71 a barrel.
Oil traders watched developments related to tropical storms headed toward the
Gulf of Mexico. They also tracked a decline in the greenback after a weekend
meeting of the Group of 20, during which policymakers offered no support for the
currency. The dollar index (DXY) hit a 15-month low on Monday. Dollar weakness
typically lifts prices of dollar-denominated commodities prices.
In Buenos Aires, shares of Petrobras rose 2.6% and shares of Tenaris (TS) rose
4.6%. The maker of steel tubes used by the oil industry last week posted a more-
than-expected fall of 62% in third-quarter net earnings. Argentina's Merval
index rose 2.7% on Monday.
Back in Sao Paulo, steel stocks including Gerdau (GGB) rose as metals prices
increased and shares iron ore Vale (RIO) gained 2.7%.
Also on Monday, China, an important market for Vale, had its credit rating
outlook raised at Moody's Investors Service. The agency said authorities in
China "are successfully steering the economy through the turbulence of the
global financial crisis," and recession.
Economists covering Brazil are, on average, more optimistic about recovery in
Latin America's largest economy. A weekly survey released by the central bank
showed economists raised their forecasts for growth in gross domestic product in
2009 and in 2010.
Analysts now expect expansion of 0.2%, compared with last week's reading of
0.18%. The current forecast for 2010 GDP growth is 4.83%, better than the
previous estimated rate of 0.8%.
Also gaining in Brazil were shares of airline Gol Linhas Aereas (GOL), up 2.4%
after an upgrade by J.P. Morgan to neutral, with the broker saying a price war
with its domestic rivals appears to be nearing an end.
Shares of rival TAM (TAM) rose 1.7% despite the broker's downgrade to
underweight because it said the airline is less exposed to the improved pricing,
and that its stock price has climbed too high.
Mexico's IPC index rose 2.1% and Chile's IPSA gained 1.1%.
In Santiago, shares of Banco Santander Chile (SAN) rose 1.1% as investors eyed
the upcoming sale by the banking firm of $500 million in three-year overseas
bonds.
(END) Dow Jones Newswires
11-09-091552ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|