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EMERGING MARKETS-Mexican shares at record high on retail sales
July 16, 2012 / 11:34 PM / 5 years ago

EMERGING MARKETS-Mexican shares at record high on retail sales

* U.S. June retail sales data disappoint
    * Brazil Bovespa falls 1.7 pct, Mexico IPC up 1 pct

    By Rachel Uranga
    MEXICO CITY, July 16 (Reuters) - Mexican shares rallied on
Monday to record highs, rising for a sixth straight session,
bolstered by strong retail sales locally, but surprisingly poor
retail sales in the United States dragged down Brazilian shares.
    The MSCI Latin American stock index slipped
0.4 percent to 3,517.25 points, hurt by U.S. retail sales that
fell for a third straight month in June, adding to concerns in
Brazil that the U.S. economic recovery is flagging.
 Brazil's Bovespa index slipped 1.71 percent to
53,401.80.
     But investors in Mexico brushed off those figures and
instead eyed U.S. manufacturing data and local retail sales. 
    Mexico's IPC stock index rose 1.02  percent to a
record 40,910.80, buoyed by private data that showed same-store
sales for Mexican supermarkets and department and specialty
stores rose on average 7.9 percent in June from a year earlier. 
    Shares were further supported by data showing manufacturing
in New York state perked up in July after a sharp drop the month
before. 
    "Obviously (U.S. retail sales data) was a negative surprise
for the market," said Luis Rodriguez, an analyst at Finamex in
Guadalajara, Mexico. "On the other hand, New York manufacturing
came out positive and that also affects Mexico," he added,
highlighting the close links between the U.S. and Mexican
manufacturing sectors.
    "The index is reflecting a positive outlook, a scenario of
growth," Rodriguez added. "We could see improvement in the
second half of the year if the economy in the United States
doesn't worsen." 
    The IPC index, which normally tracks Wall Street, has been
moving in the opposite direction over the last few sessions but
technical indicators place shares in "overbought" territory,
suggesting that the index could face losses ahead.
    Mexican conglomerate Alfa on Monday reported a 22
percent drop in second-quarter profits due mostly to a drop in
the value of the peso, which has made it costly to pay down its
dollar-based debts. Shares of Alfa ended up 0.27 percent.
 
    In Brazil, the stock index clocked its sharpest drop in four
sessions.        
    "Investors know the market is volatile. Whatever little
piece of news, whatever sneeze, people can't ignore it," said
Douglas Pinto, a broker with BGC Liquidez in Sao Paulo. 
    He added that this scenario will likely continue through the
end of the year, "or at least until we see better growth numbers
in industry and more sustainable growth in the economy."
    Piling on worries, the International Monetary Fund cut its
global growth forecasts, pointing out that emerging market
economies were being dragged down by economic troubles in
Europe. 
    Shares of OGX, the oil company controlled by
Brazilian billionaire Eike Batista, fell 6.19 percent, weighing
heavily on the index, after analysts at Deutsche Bank Securities
cut their price target and recommendation on the stock.
 
    Shares of credit card payment processor Cielo 
added 1.16 percent, while those at smaller rival Redecard
 were unchanged. Analysts surveyed by Reuters said
slowing transaction volumes, falling prices and higher expenses
during the second half may weigh on the sector's shares.
 
    On Tuesday and Wednesday investors will be eyeing U.S.
Federal Reserve Chairman Ben Bernanke's semiannual monetary
policy report for any hint at a third round of Fed bond-buying,
a measure that could stimulate risk appetite.    
    "There are some expectations about what Bernanke could say
tomorrow and Wednesday, and investors are watching that, but
there isn't much enthusiasm about (stimulus) measures," said
Reginaldo Galhardo, with brokerage Treviso Corretora in Sao
Paulo.  
    

    Latin America's key stock indexes at 2204 GMT:
    
 Stock indexes                    daily %  year-to
                         Latest    change   date %
                                            change
 MSCI LatAm             3,517.25     -0.4    -2.36
                                           
 Brazil Bovespa        53,401.80    -1.71    -5.91
                                           
 Mexico IPC            40,910.80     1.02    10.34
                                           
 Chile IGPA            20,984.84     0.37     4.25
                                           
 Argentina MerVal       2,385.09     0.15    -3.15
                                           
 Colombia IGBC         13,576.91    -0.64     7.19
                                           
 Peru IGRA             20,067.35     -0.2     3.05
                                           
 Venezuela IBC        249,226.94        0   112.95

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