By Carla Mozee
Most major Latin American equity markets rose Tuesday, tracking
gains on Wall Street after the chairman of the U.S. central bank
said the country's recession has likely reached its end.
In Brazil, the Bovespa index climbed 0.7% to 59,263.86, marking
its highest closing level this year. It was also the first close
above 59,000 since July 31, 2008.
Home-building and finance stocks paced gains in Sao Paulo, with
shares of Rossi Residencial and Gafisa (GFA) up 3.9% and 1.6%,
respectively. Banco do Brasil shares climbed 2.3% and Itau Unibanco
(ITUB) gained 1.5%.
Investors assessed a report showing a rise in Brazilian retail
sales in July. Retail sales have risen for three straight months,
and consumers aided the economy's climb out of recession during the
second quarter. Last week, officials said gross domestic product
rose 1.9% during the period.
"The consumer was the main driver of growth," in the second
quarter, and a solid consumer environment has been "underscored by
a quite resilient labor market and months of job creation," said
Alvise Marino, an emerging markets analyst at IDEAglobal.
In Mexico, the IPC rose 0.8% to end at 29,625.02, notching its
best finish in 2009. The market had started the session lower
although Mexico's largest trading partner, the U.S., said retail
sales in August posted their biggest increase in more than three
years. Sales excluding automobiles were also better than had been
expected.
Banking stocks and shares of steel tubes maker Tenaris (TS) led
Argentina's Merval to its highest close this year, up 0.5% at
1,926.05.
But Chile's IPSA slipped less than 1 point to close at
3,233.23.
Equity benchmarks on Wall Street had struggled at the start of a
speech by U.S. Federal Reserve Chairman Ben Bernanke, but stocks
managed to find higher ground after Bernanke said the recession,
from a technical standpoint, is "likely over." He also said there's
no longer widespread fear of a financial collapse and economic
activity is leveling out.
But "it's still going to feel like a very weak economy for some
time," the Fed chief said at a conference at the Brookings
Institute.
The Dow Jones Industrial Average (DJI) rose 0.6%, or 57 points,
to 9,683.41, and the S&P 500 Index (SPX) rose 0.3% to
1,052.63.
Retail sales rise in Brazil
Shares of grocer Companhia Brasileira de Distribuicao (CBD) and
department-stores operator Lojas Renner each rose 0.5%, and online
retailer B2W Companhia Global do Varejo edged 0.4% higher.
The moves came after Brazil's census bureau said retail sales in
July rose 0.5% from June, boosted by supermarket sales. The
consensus estimate was for a rise of 0.9% on a monthly basis,
according to UBS Pactual. Sales are up 5.9% on a year-over-year
basis.
"What we are seeing right now in the U.S., for example, is
mostly restocking of inventories as the main driver of growth,"
said Marino at IDEAglobal. "In Brazil, we are seeing actual
consumer demand and that's quite unique," compared with many other
countries that have been grappling with recession.
Brazilian economic activity had recorded two consecutive
quarters of contraction starting in the fourth quarter of 2008.
In other trading action, stock in Companhia Siderurgica Nacional
(SID) rose 2.3% after the steel producer confirmed in a regulatory
filing that it had issued a 10-year bond worth $750 million.
Shares of Petrobras (PBR) rose 0.5% after the company announced
a new oil discovery in the pre-salt area of the Santos Basin.
Also, Net Servicos de Comunicacao (NETCD) fell 1.1%, remaining
in the red after Moody's Investors Service upgraded its corporate
family ratings on the cable services and Internet access provider,
including a raise to Ba1 from Ba2 on the global scale.
The upgrade was based, in part, by Net's strong subscriber-based
growth with no material increase in subscriber churn or delinquency
through Brazil's economic downturn, Soummo Mukherjee, Moody's VP
senior analyst, said in a statement.
In Mexico City, manufacturing and industrial stocks were the
strongest advancers, with engineering and construction firm
Empresas ICA (ICA) up 7%, mining concern Penoles higher by 3.4% and
cement maker Cemex (CX) up 3.5%.
