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EMERGING MARKETS-Latam stocks rise on hopes for ECB bond buying
August 21, 2012 / 5:07 PM / 5 years ago

EMERGING MARKETS-Latam stocks rise on hopes for ECB bond buying

 * Investors hope ECB to limit Spain, Italy bond yields
 * Commodities, homebuilders support Brazil's bourse
 * Brazil Bovespa gains 0.93 pct, Mexico IPC flat
 By Asher Levine and Rachel Uranga
 SAO PAULO/MEXICO CITY, Aug 21 (Reuters) - Latin American
stocks gained o n T uesday as investors stepped up bets that the
European Central Bank will soon take action to lower borrowing
costs for troubled euro zone nations.
 The MSCI Latin American stock index climbed
for the first session in three, rising 0.48 percent to 3,687.15.
 Homebuilders and commodities exporters drove Brazil's
Bovespa to its second straight daily gain, flirting with a
three-month high, while Mexico's bourse remained flat.
 Shares tracked global markets higher as investors latched
onto media reports the ECB was considering setting a hard limit
on sovereign bond yields for Italy and Spain, though the ECB
issued a statement on Mon day saying it is "misleading to report
on decisions which have not yet been taken."
 Still, market perception that policymakers would soon take
more decisive action to solve the euro zone's debt crisis
continued to support local equities.
 "The foreign markets have been the focus of much turbulence,
but there is a sensation that the worst is past us," said Fabio
Cardoso, a partner with Adinvest Consultoria in Rio de Janeiro.
"Volatility has decreased a bit and that has increased the
appetite for risk."
 Brazil's benchmark Bovespa stock index rose 0.93
percent to 59,834.90, slipping from above 60,000 points, a level
the index has struggled to break this month.
 Homebuilder Gafisa rose 7.18 percent,
contributing most to the index's gains, while rival PDG Realty
 added 4.58 percent. 
 "Gains in the homebuilding sector are an important yardstick
for the entry of foreign capital," said Hamilton Alves, a senior
analyst with BB Investimentos in Sao Paulo. "Today we are
clearly seeing foreign investors returning to the stock market."
 Net foreign fund flows into the Bovespa totaled 2 billion
reais in the month through August 17 as increasing risk appetite
led investors to Brazil in search of higher returns. If the
trend continues, August would be the first month with a net
inflow of foreign funds since April.
 "(The Bovespa) will be able to stay above 60,000 points but
we will need the cooperation of foreign investors," Cardoso
said. "We don't have enough savings here to support the market
on our own."
 State-controlled oil firm Petrobras erased early
gains to lose 0.62 percent after Chief Executive Officer Maria
das Gracas Foster said on Tu esday that the company is not
negotiating with the government to raise fuel prices.
 Mexico's IPC index index was little changed, as gains
by mining firm Grupo Mexico helped offset losses
by lender Grupo Financiero Banorte.
 Shares of cement maker Cemex climbed 2.08
percent after the company said it was near completing a massive
refinancing deal that will help it get a handle on $7.2 billion
in debt maturing in 2014. 
 Latin America's key stock indexes at 1627 GMT:  
 Stock indexes                           daily %   yearly %
                       Latest          change     change
 MSCI LatAm                  3,687.15       0.48       1.87
 Brazil Bovespa             59,834.90       0.93       5.43
 Mexico IPC                 40,330.03      -0.05       8.77
 Chile IPSA                  4,266.45      -0.18       2.13
 Chile IGPA                 20,596.42      -0.15       2.32
 Argentina MerVal            2,449.57      -0.42      -0.53
 Colombia IGBC              14,259.82       0.10      12.59
 Peru IGRA                  20,380.05       1.36       4.66
 Venezuela IBC             291,761.00       0.32     149.29
 (Aditional reporting by Danielle Assalve in Sao Paulo; Editing
by Dan Grebler)

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