By Carla Mozee

Brazilian stocks logged a fresh high for the year on Tuesday, retaining a portion of their gains after the country's debt was deemed investment grade by a key ratings agency.

Brazil's Bovespa index rose 0.9% to 61,493, with a rebound in most prices for metals aiding in a climb among steel stocks, which account for 29% of the Bovespa index. Shares of iron-ore giant Vale (RIO) rose 2.6%, Usiminas gained 1.2% and MMX Mineracao surged 6.5%.

Also, oil giant Petrobras (PBR) rose 0.7% as crude prices closed above $71 a barrel.

The Bovespa hasn't closed above 61,000 points since mid-July 2008. It's now up 64% since the start of the year.

Equities had been up nearly 2% before Moody's Investors Service upgraded its ratings on Brazil's foreign- and local-currency government bonds to Baa3, or the agency's lowest level of investment grade. The outlook is positive.

Improvement in the government-debt structure was "an important contributing factor" to the upgrade, said Mauro Leos, Moody's regional credit officer for Latin America, in a statement.

The move also reflects its "recognition that the country's shock absorption capacity, including the authorities' policy response capability, points to a material improvement in Brazil's sovereign-credit profile."

The country's debt already has investment-grade ratings from Standard & Poor's and Fitch Ratings.

Brazil's currency, which hit a yearly high on Monday, fell slightly against the U.S. dollar after the ratings announcement, and traded at 1.796 reals per greenback from Monday's level at 1.792 reals.

Elsewhere, regional banking stocks regained a portion losses that came on Monday after Spanish banking firm Banco Santander (STD) said it plans to raise up to $7.3 billion from the upcoming listing of shares in its Brazilian unit on the São Paulo Stock Exchange.

The listing stands to be among the biggest this year, with the $7.3 billion initial public offering of China State Construction Engineering, and the $4.3 billion IPO of Brazil's VisaNet.

Shares of the Brazilian affiliate of Visa Inc. (V) have climbed 10% since their debut in late June.

"It's been a strong performer and investors always look at recent IPOs and their performance" as they consider new listings, said Nick Einhorn, an analyst at IPO research firm Renaissance Capital in Greenwich, Conn. "Santander is a very different company, but that's at least one data point that bodes well" for the launch of the banking company's shares in Brazil.

In Mexico, declines among stocks for communication, retail and consumer-products companies led a downturn in the equity market, leaving the IPC index lower by 0.3% at 29,513.68. The index has lost ground for the last three sessions, but is about 32% since the start of the year.

Grupo Mexico shares, however, were a standout on Tuesday, topping percentage gainers with a jump of more than 9.6% after Vedanta Resources PLC said it would limit claims against the copper miner to $900 million if it were to win control of bankrupt miner Grupo Asarco, according to a Dow Jones Newswires report.

Grupo Mexico and Vedanta's Sterlite Industries India subsidiary have been battling for control of Arizona-based Asarco. Grupo Mexico lost management control of Asarco in 2005 after Asarco's bankruptcy filing.

Shares of Cemex (CX) fell 1% as investors waited for pricing on 1.2 billion locally traded shares or equivalent American depositary shares. The cement maker's effort to raise capital is part of its debt-refinancing agreement with creditors.