* Contingency planning underway to help Spain-sources
* Brazil market bounces back from 8-month low
* Brazil Bovespa up 3.19 pct, Mexico IPC up 0.5 pct
(Add comments, closing prices)
By Danielle Assalve and Asher Levine
SAO PAULO, June 6 Latin American stocks rose on
W ednesday as Brazil's market bounced back from an eight-month
low after signs that Europe could move to rescue Spain's
troubled banks lifted equities around the world.
The MSCI Latin American stock index rose
2.48 percent as Brazil's market rose by the most in more than
Still, analysts said the market could resume the sharp
decline that started in March and has been fed by fears about
Europe's debt crisis and stalling growth in Brazil, Latin
America's top economy.
"The market is recovering a bit after yesterday's losses,
with some bargain-hunting, but it's still very vulnerable," said
Sergio Machado, a partner at Vetorial Asset in Sao Paulo.
Shares gained as sources familiar with discussions said
intensive contingency planning was already under way for
European Union aid to Spain, currently reeling from a banking
crisis and struggling with prohibitive borrowing costs.
"We had weeks and weeks of silence with the markets
worsening, and now we are seeing a new mobilization from
politicians in thinking of new strategies," said Adriano Moreno,
a strategist with advisory firm Futura Investimentos in
Brazil's benchmark Bovespa stock index rose 3.19
percent to 54,156.04, climbing back above a key support level
that was broken in the previous session and triggered stop
Analysts were still cautious. Before Wednesday's gains, the
Bovespa had slumped more than 22 percent since mid-March.
"It's still early to say that the worst is over. If the
53,000 level is supported, its possible we'll see a rally in the
next few days," Moreno said.
If 53,000 is eroded again, stocks could fall more than 5
percent to around 50,000, analysts said.
Concerns about slowing growth in Brazil have also been
hurting the local market. Data o n W ednesday showed automobile
output in May scaled back to its slowest in three months.
Shares in OGX, the oil firm controlled by
Brazil's richest man, Eike Batista, jumped 9.47 percent, while
preferred shares of Vale, the world's largest
iron-ore producer, gained 2.95 percent.
Shares in Banco Cruzeiro do Sul plunged 42.1
percent in the first trading session after a central bank
decision to intervene in the troubled consumer lender.
Mexico's IPC index rose 0.5 percent to 37,274.79 as
telecommunications firm America Movil rose 0.49
.p e rcent and top U.S. cement supplier Cemex added
Broadcaster Televisa rose 0.41 percent. Mexican
competition regulators are due o n W ednesday to give a final
verdict on the company's planned purchase of half of cell phone
Chile's IPSA index ended a three-day slump, rising
1.54 percent to 4,270.31. The index has remained mostly
rangebound between 4,200 and 4,300 points over the past month.
Industrial conglomerate Copec added 3.62 percent,
contributing most to the index's gain, while retailer Falabella
rose 1.21 percent.
(Additional reporting By Michael O'Boyle in Mexico City;
Editing by Dan Grebler)