Tuesday, June 13, 2006, 4:45 PM EST (Thomson Financial): Latin American
shares were down on continued worries about U.S. inflation and interest
rates. Brazilian markets closed early for Brazil's World Cup match and will
be closed Wednesday for a holiday.
Brazil's Bovespa Index plunged 706.91 points, or 2.11%. Mexico's
benchmark Bolsa index fell 333.12 points, or 1.96%, while Argentina's
Merval Index lost 14.91 points, or 0.99%.
Brazilian shares were down on higher May U.S. producer price index data
that could lead to a continuation of the U.S. monetary tightening cycle
currently draining funds from emerging markets. U.S. producer prices, a
closely watched measure of wholesale inflation, rose 0.2% in May, while
core prices, which exclude food and energy, rose 0.3%.
Meanwhile, Brazilian inflation is also rearing its head. The Elution
Vargas Foundation IMP-M index showed four-week inflation of 0.27% through
early June, up from 0.21% for the period through early May. The combination
of domestic inflation and emerging market worries could cause the Brazilian
Central Bank to halt its recent policy of monetary loosening.
Elsewhere, Mexican stocks also closed lower for the seventh consecutive
session, spurred by investors pulling money out of emerging markets.
Concerns persist that rising interest rates around the world will hinder
market liquidity. Meanwhile, investors are also awaiting the presidential
election in Mexico, scheduled to take place on July 2.
In economic headlines, Mexico's April industrial production slipped
versus the year-ago month as the Easter holiday lowered the number of
working days. Production fell 0.8% from April 2005, below the median
estimate of a 2.3% increase in a Dow Jones Newswires survey of economists.
In non-annualized, seasonally adjusted terms, output was up by 1.74% versus
March. Industrial production for the first four months of the year was up
5% versus the year-ago period.
Argentine issues dropped today as well. Trading was volatile, as market
titan Ternaries rallied, which helped ease broader market losses. Ternaries
jumped on word it intends to buy U.S.-based Maverick Tube for about US
$3.19 billion in cash.
-- Michael.O'Brien@contractor.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 Corporate Group
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