By Carla Mozee
Major Latin American equity markets finished mixed Thursday,
with benchmarks in Brazil and Argentina finding strength from
surges in prices for crude oil and metals in the wake of the U.S.
Federal Reserve's plan to pump up the money supply.
Argentina's Merval rose 1.2%, with Buenos Aires-listed shares of
Brazilian oil giant Petroleo Brasileiro up 3.5%, Petrobras Energia
(PZE) up 2.5% and Tenaris (TS), maker of steel tubes for use in the
oil industry, higher by 3.8%.
The stocks benefited from a 7% jump in crude-oil futures to
above $51 a barrel for their best closing level in nearly four
months.
In the metals market, silver rallied nearly 13% to $13.445 an
ounce and copper for May delivery surged 5.3% to $1.8075 a
pound.
Commodities as tracked by the Reuters/Jefferies CRB Index (CRB)
gained 5.3%.
The prospect that the ailing U.S. economy may soon find firmer
ground boosted prices for natural resources. The U.S. Federal
Reserve surprised the markets Wednesday when it said it will buy
$300 billion in longer-term Treasury bonds and purchase more
mortgage-backed securities.
The central bank "promised everything and more that the Fed can
do to stabilize the economy and banks," wrote Sherry Cooper, chief
economist at BMO Capital Markets, in a note. "As well, the Fed
committed to keeping the overnight rate at 0-to-25 basis points for
an extended period of time. It doesn't get more aggressive than
that."
Petrobras (PBR) shares traded in Sao Paulo climbed 3.4% as oil
prices surged. Also, the company may begin drilling in Cuba's coast
within about a year, according to a Dow Jones Newswire report,
citing Brazilian Mines and Energy Minister Edison Lobao.
Lobao also told the news agency on Wednesday that Brazil is
considering joining the Organization of Petroleum Exporting
Countries, but the move would be the right one only if Brazil
becomes an oil exporter.
Brazil's Bovespa index rose 0.8% to 40,453.43 with help from
steel stocks. Usiminas climbed 6.4%, Vale (RIO) rose 1.3%, and
Gerdau (GGB) picked up 0.4%.
Investors also assessed minutes from last week's meeting of
Brazilian central bankers, at which they cut the key Selic rate to
11.25%.
The overall tone of the minutes was "relatively dovish, in line
with the 150 [basis points] interest rate cut," wrote analysts who
cover Latin America at Barclays Capital Research.
"The most important dovish hints are the evaluation that
domestic demand is adjusting considerably (the meeting was one day
after the dismal 4Q09 GDP release), that activity weakness will
probably be persistent, and that this should contain
inflation."
Barclays analysts backed their forecast for another rate cut of
150 basis points on April 30, "but recognize that the pace of cuts
could be lowered."
On Friday, Mexican central bankers will release their decision
on interest rates. Analysts expect the Bank of Mexico to cut its
benchmark rate by 25 basis points to 7.25%, according to a Dow
Jones Newswire survey.
Mexico's IPC lost an earlier advance to close down 0.1%.
Most metals stocks showed strength. Industrias Penoles shares
rose 3% and copper miner Grupo Mexico rose 1.3%.
Cemex shares fell 1.2% ahead of the cement maker's first-quarter
results due after market close.
Moody's on Thursday downgraded the senior notes of the company's
Rinker Materials unit to B2 from B1. The ratings agency also said
it will subsequently withdraw the rating based on its "belief that
on a go-forward basis it will lack the appropriate information to
effectively assess the creditworthiness of Rinker, and its parent,
Cemex."
Cemex has been working with its bankers to restructure about
$14.5 billion in debt, much of its Cemex accumulated when it
purchased Rinker in 2007.
In Santiago, the IPSA index shed 0.4% at 2,502.52.