Friday, June 23, 2006, 4:45 PM EST (Thomson Financial): Latin American
shares moved higher today as Mexico's central bank left interest rates
unchanged, Brazilian shares recouped early losses and Argentina followed
the positive sentiment higher as worries about U.S. interest rates and
inflation took a back seat to local developments.
Brazil's Bovespa Index leapt 344.45 points, or 1.00%. Mexico's
benchmark Bolsa surged 357.33 points, or 1.96%, while Argentina's Merval
Index gained 11.4 points, or 0.72%.
Brazilian stocks wiped out early losses to register gains after falling
1% at the start of trade in Sao Paulo. Investors eyed economic data from
the U.S., which showed orders for new U.S.-made durable goods fell a
more-than- expected 0.3% in May. It marked the second decline in a row,
with orders now down 3.5% since a peak in December.
Shares in Brazil's largest bank, state-controlled Banco do Brasil, were
down 3.6% in the run-up to a large secondary share offering next week.
Banco do Brasil is in the midst of an operation to sell a total of 45.4
million common shares via a secondary offering, and will set a price
Monday.
Mexico's stocks moved higher as the Bank of Mexico left interest rates
unchanged at its policy meeting, encouraging investors worried about
monetary tightening trends throughout the worlds leading economies. The
bank of Mexico left the overnight rate at a minimum 7% and reiterated that
its recent easing cycle is over for now.
The decision was widely expected, coming nine days before presidential
elections and amid growing concern about rising global interest rates. The
U.S. Federal Reserve is expected to raise rates next week, and the U.S.
market is pricing in another rate hike in August.
Mexico holds general elections July 2 to elect a new president and
Congress. Separate election polls published Friday by Mexico's Reforma and
El Universal newspapers gave leftist presidential candidate Andres Manuel
Lopez Obrador a narrow lead over his conservative rival Felipe Calderon.
Argentine issues tracked Mexico and Brazil higher on today's session. A
rally in the shares of market heavyweight Tenaris bolstered the key Merval
Index.
-- 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
Financial, please visit our web site at http://www.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
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