Stocks up in Mexico, Argentina, Chile; down in Brazil, Venezuela

Tuesday, June 17, 2003
(06-17) 16:21 PDT MEXICO CITY (<a href=www.sfgate.com>AP) --

Mexican stocks rallied again Tuesday and rose to their highest level since May 29, 2002, led by broadcaster TV Azteca on an upgrade.

The market's key IPC index closed up 1.6 percent, or 110.74 points, at 7130.23 points. Volume was a solid 135.6 million shares worth 1.64 billion pesos, compared with Monday's 101.1 million shares worth 1.2 billion Mexican pesos.

The local market continued its recent bullish trend, while U.S. stocks rose on some positive economic data, including a 0.1 percent increase in industrial output for May and flat consumer prices last month allaying fears of deflationary pressure.

Broadcaster TV Azteca CPO shares led the charge, soaring 11 percent after its wireless phone affiliate Unefon settled a legal dispute with Canada's Nortel Networks, securing continued supplies and extending debt in the process.

SAO PAULO, Brazil (AP) -- Brazilian shares closed lower Tuesday amid expectations the central bank will likely decide to cut the reference lending rate at the end of its two-day meeting Wednesday.

While a rate cut would usually lift shares, selling on the U.S. market and a drop in local banking stocks pushed the main Sao Paulo stocks index lower, closing 0.4 percent down at 13,776 points. Volume totaled a strong 644 million reals.

Economists believe the central bank will opt for a symbolic cut of 50 basis points to 25.50 percent to help provide some relief for a sagging economy at a time when consumer price inflation is slowing.

Expecting such a cut, which would be the first of its kind in about a year, investors sold banking stocks as earnings are highly sensitive to any changes in the key lending rate, said a Sao Paulo-based trader.

BUENOS AIRES, Argentina (AP) -- Argentina's large-cap Merval Index continued last week's voluminous rally Tuesday as investors deepened their positions during the week's first trading day.

At the close of Tuesday's session, the Merval had surged 23.55 points, or 3.06 percent, to 791.94 points, surpassing levels last seen in October 1997. The broader General Index gained 766.25 points, or 2.32 percent, to close at 33,762.49 points.

Analysts said the local markets - closed Monday for a national holiday - benefited from the positive sentiment sweeping through global stock exchanges. On Monday, the Dow Jones Industrial Average rose 2.21 percent, following gains in European and Asian markets.

"Trading today showed a consolidated rise in line with international markets and funded by new capital," said Hernan Fardi, the senior analyst for Maxinver.com, a local financial consultancy.

Over the past two weeks, Argentine and international investors have begun staking positions in more liquid local stocks, lured by better returns on shares than government debt instruments. Such shifts helped push the Merval 6.7 percent higher last week and have made it the best performing market in the world.

SANTIAGO, Chile (AP) -- Chilean shares on the Santiago Stock Exchange rose again Tuesday, boosted by gains in utilities-holding Enersis, retailer Falabella, and airline LanChile that were underpinned by rising U.S. share prices, traders said.

Chilean shares had lost their impetus in recent sessions after a prolonged rally.

Chile's blue-chip Ipsa index ended up 0.4 percent at 1282.64 points from 1277.94 Friday. Markets were closed Monday for a national religious holiday.

The Inter-10 index of more liquid, internationally traded Chilean shares gained 0.7 percent to 124.69 from 123.81, driven higher by rising U.S. stocks.

Volume rose slightly to 17.77 billion pesos from CLP16.44 billion.

CARACAS, Venezuela (AP) -- Venezuelan shares ended mostly unchanged Tuesday, with the IBC General Stock Index losing 0.5 percent to close at 13352 points as investors returned from a long weekend.

Local markets were closed Monday to mark a religious holiday.

The exchange's biggest stock, CA Nacional Telefonos de Venezuela, which accounts for 40 percent of the IBC, ended 85 bolivars higher at 4,600 bolivars.

Trades in CANTV, as the company is known, were equivalent to about US$1.58 million out of the exchange's total volume of US$1.71 million.

CANTV has found buyers after a decision by the company's transfer agent to resume converting local shares to American Depositary Receipts.