Friday, May 5, 4:45 PM EDT (Thomson Financial): Latin American stocks
were mixed to higher, with Brazilian shares gaining, as sluggish U.S. jobs
data boosted hopes that the U.S. Federal Reserve will pause its monetary
tightening cycle.
Brazil's Bovespa Index jumped 441.49 points, or 1.08%. Mexico's
benchmark Bolsa Index dipped 56.21 points, or 0.26%, while Argentina's
Merval Index surged 46.28 points, or 2.50%.
Brazilian shares advanced, as weaker-than-expected U.S. jobs data
helped to ease worries about a continued rise in U.S. interest rates. U.S.
nonfarm payrolls rose by 138,000 in April, less than the 199,000 expected
by economists. The data boosted hopes that the U.S. Federal Reserve will
take a more dovish stance on monetary policy. Higher U.S. interest rates
tend to divert investment flows away from emerging markets like Brazil.
In local economic news, Brazilian industrial output fell 0.3% in March
from February but jumped 5.2% from a year earlier. The IBGE said the
month-on- month decline was due to seasonal factors including a retooling
of industrial facilities.
On the corporate front, Brazilian airline TAM SA reported a
first-quarter net profit of 111.2 million reals, up sharply from 53.5
million reals a year earlier, on an expansion of routes and rising overall
demand. Net revenue was up 24% to 1.59 billion reals.
Meanwhile, a major investment bank downgraded Vivo Participacoes to
"underweight" from "neutral." "We see first-quarter results as a
significant downward inflection point, as Vivo service revenues declined
for the first time in nominal terms. Going forward, we do not expect this
negative trend to reverse significantly, given Vivo's apparent inability to
thrive in a very competitive environment," the bank said.
Elsewhere, Mexican shares ended lower after erasing earlier gains on an
improved outlook for U.S. interest rates. In corporate news, airport
operator Asur said April traffic at its airports was down 2.3% from April
2005, due partly to the slow recovery of tourist travel to Cancun and
Cozumel following Hurricane Wilma.
Argentine issues followed regional equities higher, in a quiet news day
for the local market. Argentine natural gas pipeline operator
Transportadora de Gas del Sur SA posted a quarterly net profit of 90.4
million Argentine pesos, down from 93.2 million pesos a year ago.
-- 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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