Wednesday, June 7, 2006, 4:45 PM EST (Thomson Financial): Latin
American stocks struggled to get out of the red for the third consecutive
day--but to no avail--as ongoing comments from U.S. Federal Reserve
policymakers continued to weigh on investors concerned about the prospects
for inflation and further interest rate hikes.
Brazil's Bovespa index tumbled 1293.80, or 3.54%. Mexico's benchmark
Bolsa declined 384.84 points, or 2.05%, while Argentina's Merval Index
dropped 26.13 points, or 1.59%.
Brazilian stocks extended recent losses, as investors remained cautious
about a global economic slowdown and possible interest rate increases in
the U.S. Falling stock markets in other large emerging markets, such as
Mexico, India and Russia, also weighed on the Bovespa.
Elsewhere, Mexican stocks headed south as well, with investors
remaining cautious about U.S. inflation pressures. The anxiety has taken a
toll on emerging markets, as investors sell off holdings and seek greener
pastures before the U.S. Federal Open Market Committee's June 29 meeting to
determine the course of interest rates.
The emerging markets correction of the past month has pulled the IPC
down from a record-high close of 21,823 points on May 9, but the index is
up about 800 points from its 2005 close. Shares may have also been
pressured recently by pre-election jitters, as Mexicans are scheduled to
vote for a successor to President Vicente Fox on July 2.
Among individual Mexican companies, shares of wireless phone company
America Movil and fixed-line phone company Telmex both retreated.
Still in Mexico, airport operator Asur's shares slid after the company
said the effects of Hurricane Wilma last year continued to weigh on
passenger volumes in May at the Cancun airport, particularly among
international travelers. Overall airport volumes fell 4.7% year-on-year.
Meanwhile, Argentina has made a counteroffer aimed at breaking an
impasse in the drawn-out bilateral talks aimed at renewing the country's
contract for natural gas imports from Bolivia, according to news reports
citing a Bolivian official.
Local newspapers in Argentina Wednesday cited Bolivian Planning
Minister Carlos Villega as saying that his counterparts in the Argentine
Planning Ministry had suggested a price of $5.00 per million British
Thermal Units against Bolivia's standing offer of $5.50 per million BTU.
--Michael.O'Brien@contractor.Thomson.com
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
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SOURCE Thomson Financial Corporate Group
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