By Carla Mozee
Mexican and Brazilian stocks rose Wednesday, as improving U.S.
economic data and a stronger-than-anticipated monthly trade surplus
in Brazil allowed the benchmarks to start the second half of 2009
building on their best quarterly performances in years.
Mexico's IPC index rose 1% to 24,607. The index in the previous
session closed of the second quarter with a rise of 24%, its best
quarter since the fourth quarter of 1999.
Brazil's Bovespa index rose 1.2% to 52,067. The index tracking
the largest equity market in Latin American gained 25.8% for the
second quarter, its highest finish since the third quarter of
2005.
Investors tracked a positive stream of data from the U.S., whose
economic recovery is important particularly for Mexico, which ships
more than 80% of its products to the U.S.
The Institute of Supply Management said the U.S. manufacturing
sector contracted at a slower pace in June, indicating that growth
for the sector should soon arrive. The index rose to 44.8%, higher
than the 42.8% reading in May. The June result was the highest
since last August.
The National Association of Realtors said pending sales of
existing homes ticked up 0.1% in May, rising for the fourth
straight month. The index is 6.7% above May 2008.
On Wall Street, the S&P 500 Index (SPX) rose 0.9% to 927 and
the Dow Jones Industrial Average (DJI) rose 1.1% to 8,538.
In trading action, shares of Mexican cement maker Cemex (CX)
rose 3.9% on their home market. The company said Tuesday that it's
presenting a plan to lenders to have $14.5 billion of its debt
rescheduled through 2014. Cemex officials were slated to continue
talks with banks on Wednesday in Madrid.
Credit Suisse in a note to clients Wednesday said a status
update from the company acknowledges "for the first time" that it
could be forced to issue equity to reach a final agreement with its
lenders, "given their prolonged inability to meet debt amortization
schedules and the increasing pressure deriving from the upcoming
expiration of the stand-still agreement."
The agreement expires on July 31.
Cemex said Tuesday that it continues to make "significant"
progress with the key banks that hold the bulk of its debt.
Elsewhere, shares of wireless service provider America Movil
(AMX) rose 1.7%. The most heavily weighted stock on the index
finished the second quarter with a rise of 32%, the highest
percentage gain since the second quarter of 2007.
In Sao Paulo, iron ore supplier Vale (RIO) rose 2.6%.
In China, a key market for Vale, the China Federation of
Logistics & Purchasing said its purchasing managers' index rose
for a fourth consecutive month. The index is a gauge of regional
manufacturing activity.
Steel makers advanced. Usiminas climbed 2.9% and Gerdau (GGB)
gained 2.5%.
Brazil's currency surged 1.3% against the U.S. dollar after the
Brazilian trade ministry said the trade surplus widened to $4.6
billion in June as exports increased on greater demand for natural
resources. Analysts polled by Dow Jones Newswires had expected the
trade surplus to reach $4.14 billion. June's surplus jumped from
May's reading of $2.6 billion.
The real traded at 1.936 per greenback, compared with Tuesday's
level of 1.962.
Shares of oil giant Petroleo Brasileiro (PBR) slipped 0.3% as
oil futures lost grip of earlier gains as U.S. government data
showed crude inventories rose for the first week in five. Oil for
August delivery slipped 0.8% to $69.36 a barrel.
Argentina's Merval surged 2.7% to 1,634, with shares of steel
tube maker Tenaris (TS) up 3.1%.
Shares of Aluar rose 1.7%. The aluminum maker's stock was
reportedly added to the Merval index as part of a third-quarter
shuffle of the benchmark's lineup. Shares of Banco Patagonia were
removed. They were up 5.3% in recent trade.
Chile's IPSA gained 1.1% to 3,123.
