Friday, May 26, 4:45 PM EDT (Thomson Financial): Latin American stocks
rallied, building on yesterday's gains, as investors continued searching
for bargains while cheering U.S. economic data that eased concerns about
rising U.S. interest rates.
Brazil's Bovespa Index jumped 1061.05 points, or 2.82%. Mexico's
benchmark Bolsa Index gained 179.50 points, or 0.92%, while Argentina's
Merval Index surged 99.07 points, or 6.28%.
Brazilian stocks extended yesterday's gains on continued bargain
hunting and today's reassuring U.S. economic data. U.S. personal income
rose 0.5% in April, after rising 0.5% in March, while personal consumption
climbed 0.6%, after a revised 0.5% increase the month before. Both personal
income and spending were slightly below analyst expectations for April.
Meanwhile, the core PCE price index rose 0.2% in April, as expected, after
a 0.3% gain in March. The data helped to ease worries that the Federal
Reserve will continue raising interest rates in a bid to contain inflation.
Closer to home, the Brazilian Census Bureau reported today that the
IPCA- 15 price index rose 0.27% between April 12 and May 15, up from 0.17%
in the March 15 to April 11 period and at the high end of the expected
range of 0.1% to 0.28%.
On the corporate front, meatpacker Perdigao SA agreed to buy a 51%
stake in Batavia S.A. Industria de Alimentos for 109.7 million reals.
Meanwhile, Arcelor Brasil was in focus following news that parent
company Arcelor will merge with Russian steelmaker OAO Severstal. Arcelor
said late yesterday that it would exchange a 32% stake in the company for
all of Severstal's steel assets, the assets of Italian steelmaker Lucchini
SpA, as well as a US$1.59 billion payment from Severstal controlling
shareholder Alexey Mordashov.
Elsewhere, Mexican shares climbed for a second straight session on
pleasing U.S. and local economic data. In a sign of local economic
strength, Mexico's retail sales jumped 3.2% in March from a year ago,
according to the National Statistics Institute. However, sales dropped 1.7%
from a year earlier.
In other data, Mexico posted a current account surplus of US$882
million in the first quarter, as inflows were helped in part by high oil
prices. The surplus was equal to 0.4% of gross domestic product.
Meanwhile, the Bank of Mexico today left the overnight rate unchanged
at 7%, saying there is no more room for further easing in the foreseeable
future. The move had been widely expected.
Argentine issues soared today, as the Merval played catch up to other
Latin American markets after being closed yesterday for a national holiday.
-- 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
our reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about Thomson
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SOURCE Thomson Financial
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