EMERGING MARKETS-Latam stocks hit 2-1/2 year, pullback seen

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  • Posted on April 7, 2011

    S&P hovers near resistance, but volume still weakTue, Apr 5 2011Gold hits record, oil tops $122 a barrelTue, Apr 5 2011EMERGING MARKETS-Latam stocks rise to highest since NovMon, Apr 4 2011S&P closes flat, fails to break through resistanceMon, Apr 4 2011EMERGING MARKETS-Latam stocks rise but near overbought levelsMon, Apr 4 2011 Analysis & Opinion The world according to Robert Zoellick Email theft: Is your company sorry? Related Topics Stocks » Global Markets » Stocks

    Tue Apr 5, 2011 6:07pm EDT

    * Chilean stocks lead gains after strong growth data

    * Vale CEO pick could help ease tensions with government

    * Brazil Bovespa up 0.19 pct, Mexico IPC down 0.19 pct

    By Luciana Lopez and Michael O’Boyle

    SAO PAULO/MEXICO CITY, April 5 (Reuters) – Latin American stocks rose to their highest since June 2008 on Tuesday, but profit-taking in Mexico and signs Chile’s rally may be running out of steam could limit gains in the coming sessions.

    The MSCI Latin American stocks index .MILA00000PUS rose 0.42 percent, extending a rally seen since mid-March.

    Investors bet a move on Tuesday by China to tighten borrowing costs would help manage to tame strong growth without undermining high prices for Latin America’s key commodities.

    “China will keep growing, just at a slower pace,” said Gerardo Copca, a strategist at consultancy Metanalisis.

    China is Brazil’s top trading partner and also one of Chile’s top customers for its copper.

    Chilean stocks led gains in major regional markets, with the IPSA index .IPSA rising 0.56 percent to close at its highest since late January as industrial conglomerate Copec CPO.SN rose 1.99 percent.

    Surprisingly strong growth data in Chile backed bets that the country’s stocks could see solid profit growth during the first quarter. [ID:nN05100042]

    However, the IPSA’s relative strength index hit a level that suggested it was overbought, which could push some investors to take profits in the coming sessions. The RSI is used in technical analysis to gauge an asset’s momentum.

    In Brazil, Adriano Moreno, a strategist with Futura Investimentos, said flows into Latin America had stabilized after foreign investors pulled out of emerging markets during the first quarter of the year to return to developed markets.

    Brazilian stocks lagged other major markets in Latin America last year, but high hopes for corporate profits this year were now buoying stocks, he said.

    “Generally, there’s a more optimistic climate,” Moreno said.


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