Friday, April 21, 4:45 PM EDT(Thomson Financial): Latin American stocks
gained ground, with Mexican stocks getting a boost from news of a surprise
interest-rate cut. Brazil's market was closed today for a holiday.
Mexico's benchmark Bolsa Index climbed 195.10 points, or 0.98%, while
Argentina's Merval Index jumped 22.41 points, or 1.18%.
Mexican stocks rallied for a fifth straight session, as investors
reacted positively to news that the Bank of Mexico unexpectedly cut the
overnight rate by another 25 basis points to 7%. It was the bank's ninth
straight cut. The bank had widely been expected to pause its easing cycle
until after Mexico's presidential elections in July.
On a less upbeat note, the Bank of Mexico signaled the end of its
easing campaign, saying it "had concluded that no space existed for an
additional relaxation" of policy in the foreseeable future. The bank also
expressed some caution about external financial market conditions, saying
that expectations that central banks in other major markets were raising
rates "has provoked increases in long-term interest rates, producing
volatility and some correction in asset and currency prices in emerging
markets." At its March rate meeting the bank had indicated that any future
monetary easing would depend on both external financial conditions and
Mexico's inflation outlook. The central bank maintained its forecast for
inflation to end the year between 3% and 3.5%. The bank's goal is 3%.
In economic data, the National Statistics Institute said Mexico's
retail sales rose 3.3% in February from a year ago and added 0.27% from
January in seasonally adjusted terms.
On the corporate front, auto insurer Qualitas Compania de Seguros SA
reported a 45% jump in first-quarter net profit, helped by higher
investment income.
Meanwhile, two major brokerages cut their ratings on shares of
homebuilder Consorcio Ara SA, citing recent gains in the share price.
Elsewhere, Argentine issues extended a recent run-up in a quiet news
day for the market. Among the headlines, Argentine President Nestor
Kirchner has taken steps to restructure the Economy Ministry, according to
a series of decrees published yesterday in the Official Bulletin. The
restructuring centralizes the policy of negotiating prices with the
business sector under the control of new Secretary for Technical
Coordination, Guillermo Moreno.
-- Paul.Davee@thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Latin American Commentary.
The information herein is believed to be true and accurate, we take no
responsibility for inaccurate information and reserve the right to update
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SOURCE Thomson Financial Corporate Group
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