Tuesday, June 27, 2006, 4:45 PM EST (Thomson Financial): Latin American
shares collectively declined alongside a depressed U.S. market. Brazilian
shares ultimately soured, and the local market closed early due to Brazil's
game at the World Soccer Cup competition. U.S. interest rate concerns
continued, as higher rates tend to push money out of emerging markets.
Brazil's Bovespa Index fell 255.51 points, or 0.74%. Mexico's benchmark
Bolsa slumped 469.93 points, or 2.54%, while Argentina's Merval Index
receded 22.42 points, or 1.38%.
Brazil reversed direction later in the session and ultimately turned
negative. Local shares were partially influenced by declines in the U.S.
ahead of this Thursday's U.S. interest rate decision. Analysts widely
expect a rate hike this Thursday, with a possible hike also at the next
meeting in August.
In economic headlines, the Fipe research foundation reported that
consumer prices in Sao Paulo dropped 0.44% in the four weeks ended June 23,
a slower pace in declines compared to the 0.50% drop witnessed in the four
weeks ended June 15.
Mexican shares also continued to retreat today, alongside declines in
the U.S. All eyes remain on Thursday's U.S. FOMC meeting on interest rates
and local presidential elections this coming weekend.
On the economic front, the National Statistics Institute, or Inegi,
said its global indicator of economic activity, or IGAE, advanced 1.8% in
April compared to a year ago. On a seasonally adjusted basis, the most
recent result was up 0.79% from March.
Media conglomerate Grupo Televisa bucked the broader negative trend in
favor of gains. The firm lost its bid to purchase U.S.-based Univision,
which instead opted to be bought out by a consortium of private equity
investors for US$12.3 billion.
Argentine issues also succumbed to negative sentiment, following two
consecutive sessions of gains. In economic news, the national statistics
agency, or Indec, said that May construction activity jumped 23.9% on the
year and 2.0% from April on a seasonally adjusted basis.
Retail sales were also in the spotlight. Indec reported that
supermarket sales rose 2.0% in May from April, and advanced 8.9% from a
year ago. Shopping center sales advanced 2.4% on the month and rose 11.1%
on the year.
-- Linda.Shea@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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