EMERGING MARKETS-Latam stocks up on US data, but Brazil slides

By Luciana Lopez and Michael O’Boyle | Reuters | Tue Dec 14, 2010 1:52pm EST
* Bovespa down 0.33 pct, Mexico‘s IPC up 0.08 pct
* Strong U.S. retail data support in Chile, Mexico
* Brazil shares struggle on uncertainty next year (Updates to afternoon)
SAO PAULO/MEXICO CITY, Dec 14 (Reuters) – Latin American stocks gained on Tuesday as strong U.S. data lifted equities in Mexico and Chile even as Brazilian shares struggled in the face of ongoing economic uncertainty.
The MSCI Latin American stocks index .MILA00000PUS added 0.39 percent in the afternoon, despite choppy trading through the session.
Chile and Mexico got support from data showing U.S. retail sales were stronger than expected in November, offering further evidence the economic recovery there gathered steam in the fourth quarter. For details, see [ID:nN14261708]
“This is offering a bit of a lure that the (U.S.) economy is apparently, more or less, favorable,” said Juan Jose Resendiz, head of trading at brokerage Arka in Mexico City.
The United States, the world’s biggest economy, consumes the lion’s share of Mexican exports.
Mexico’s IPC index .MXX moved up 0.08 percent, adding to two sessions of gains.
Shares of leading retailer Walmex (WALMEXV.MX) led gains, rising 1.24 percent and trading near life highs.
Cemex (CMXCPO.MX), the world’s No. 3 cement maker, added 1.53 percent. The stock hit its highest intraday level since late July.
But Brazil’s benchmark Bovespa index .BVSP dropped 0.33 percent to 68,897.65, almost back to its 2009 close of 68,588.41.
The index has been rangebound since late November, unable to close above 70,000 points.
“Over the course of this month, equities have been more solid abroad,” said Jankiel Santos, chief economist at BES Investimento in Sao Paulo.
“There’s still uncertainty with the incoming government,” he said. “Things are kind of on standby.”
On Jan. 1 the government of Dilma Rousseff takes office.
While Rousseff campaigned on promises to extend the policies of her mentor, the current Pres. Luiz Inacio Lula da Silva, she has also promised fiscal austerity, and markets are waiting to see what other changes she might have in store.
Among stocks falling in Sao Paulo were steelmakers. Gerdau (GGBR4.SA) gave up 2.34 percent, Usiminas (USIM5.SA) 1.16 percent and CSN (CSNA3.SA) 0.87 percent.
But shares of retailer Lojas Renner (LREN3.SA) moved up 0.85 percent.
“Looking into 2011, LREN’s sales floor expansion plan and stable profitability should drive the stock,” Gustavo Piras Oliveira of UBS wrote in a report to clients. “We think the recent pullback in the stock leads to a very attractive entry point.”
Chile’s IPSA index .IPSA moved up 0.25 percent, approaching the psychologically key 5,000-point level.
Retailer Falabella (FAL.SN) led gains, moving up 2.47 percent and touching its highest point since early November.
Article via Reuters