By Carla Mozee
Mexican and Argentine equities jumped Monday, leading advancers
in Latin America as investors returned from a two-session break to
ride gains in the region and on Wall Street.
Mexico's IPC climbed 6.4% to surpass the "psychological" level
of 21,000 points, according to Vector Casa de Bolsa on Monday. The
index ended at 21,838.96, its best closing level since Jan. 13.
Gainers were led by a 13% jump in shares of home builder Homex
(HXM) and a 11% climb in shares of baked good maker Grupo
Bimbo.
Banking stocks were also up strongly, with Grupo Financiero
Inbursa up 5.2% and Grupo Financiero Banorte higher by 9.1%.
Investors are looking to Friday's interest-rate decision by the
Mexican central bank, which is expected to cut to lower the key
rate by 50 basis points to 6.25%, according to a Dow Jones survey
of analysts.
Argentina's Merval surged 5.9% to 1,195.38.
Trading was closed Thursday and Friday in Mexico and Argentina
ahead of the Easter holiday. The IPC finished the shortened week
down 1.9%, and the Merval fell 2.8%.
In Santiago, locally listed shares of Brazilian oil heavyweight
Petrobras on Monday rose 5.1% and stock in its Argentina-based
unit, Petrobras Energia (PZE) rose 3.7% despite a drop in crude
prices.
Shares of Tenaris (TS), maker of steel tubes used by oil
companies, jumped 8.7%.
In Sao Paulo, shares of oil giant Petrobras (PBR) slipped
0.2%.
The gains in most regional oil and oil-related issues came
despite a 4.3% decline in crude prices to $50 a barrel. Oil for May
delivery had lost more than 6% during the session after the
International Energy Agency cut its forecast for global oil demand
by 1 million barrels a day. The forecast is for 83.4 million
barrels a day, down 2.4 million barrels a day below the level in
2008.
A jump in metals prices helped lift most metals stocks in
Brazil. Companhia Vale do Rio Doce (RIO) gained 2.4%, Gerdau (GGB)
rose 3.3% and CSN (SID) rose 2.5%. But Usiminas finished down
0.6%.
The standout metal was copper for May delivery, up 2.8% to $2.13
a pound to finish at its highest level since October "as falling
inventories and signs of economic recovery in China suggested a
brighter demand outlook," said BMO Capital Markets analyst Bart
Melek in his global commodity-strategy note released Monday.
In Mexico, shares of copper miner Grupo Mexico rose 4.8%.
Anticipation that China's efforts to revive its economy will
help pull the global economy out of recession have bolstered many
markets in countries rich with natural resources.
"Investors are also speculating that record Chinese money-supply
growth, surging credit creation and possible additional stimulus
may cause inflation, prompting Chinese capital to use copper as a
hedge," Melek wrote.
He cautioned that the rally in copper is "somewhat overdone,"
and that a correction will arrive in the coming weeks and months,
though a decline isn't likely to test recent lows.
"As for using copper as a hedge against inflation and the
dollar, it tends not to work out too well when supply/demand
conditions are convincingly tilted toward oversupply," the analyst
said.
Elsewhere in Brazil, stock in Tam (TAM) and Gol (GOL) rose after
regulatory data showed domestic air-traffic volume rose 3.6% in
March. Tam shares surged 11% and Gol gained 4.7%.
The benchmark Bovespa index rose 1% to 45,991.89. In Chile, the
IPSA gained 2% to 2,636.51.