LATIN AMERICAN MARKETS: Brazil, Argentina Higher In Post-holiday Trading

By Carla Mozee

Equities across Latin America rose Tuesday, with post-holiday advances driven by home building issues and commodity-related stocks as the U.S. dollar fell against its key rivals.

Brazil's Bovespa rose 0.9% to 64,645.59, closing at its highest level since late-June 2008. Trading was closed Monday in observance of the Our Lady of Aparecida bank holiday.

In Sao Paulo, home builder Gafisa (GFA) led price performers with a rise of 8.8%. Shares of Rossi Residencial gained 5.3%.

Retailers rose 2.1% with shares of grocer CBD (CBD) up 1.9% and Lojas Americanas advancing 2.3%.

The stock gains followed a weekly survey of analysts, conducted by the Brazilian central bank, which showed that they have raised their expectations for economic growth for this year and next year. The consensus estimate for gross domestic product growth in 2009 rose to 0.1%, higher than the previous estimate of 0.01%.

For 2010, analysts expect growth of 4.8% compared with last week's estimate of 4.5%, according to the survey published Tuesday.

Most metals prices climbed as the dollar dropped against its major competitors. Platinum and palladium shares hit their highest levels in more than a year. The dollar index (DXY) -- a measure of the dollar against a trade-weighted basket of currencies -- fell 0.5% to 75.77. Earlier in the session, it fell below 75 for its weakest level in 14 months.

The index's level of 75.95 represents a "trapdoor, not a floor," wrote Richard Ross, global technical strategist at Auerbach Grayson, in a report on Tuesday, adding that there's "no indication that bearish momentum is ebbing."

The bulk of steel stocks in Brazil were higher, with MMX Mineracao up 5%, Gerdau (GGB) up 4% and CSN (SID) up 1.6%. But shares of Vale (RIO) slipped 0.3%.

Brazilian state-run oil giant Petrobras (PBR) picked up 0.5% as oil futures rose above $74 a barrel.

Tenaris 'buy' on nat gas

In Argentina, locally listed shares of Petrobras rose 1.1%. Petrobras Energia (PZE) rose 2% and market heavyweight Tenaris (TS) rose 1.3%.

UBS on Monday started coverage of Tenaris, which makes steel tubes used by the oil and gas industry, with a buy rating.

"We believe that demand will pick up over the next 12 months, due to higher U.S. natural gas prices, rising activity in Russia and China, and the upgrading of the offshore fleet," wrote UBS analyst Alex Brooks in a note to clients. "Tenaris has worldwide exposure, especially to the early-cycle U.S. market."

The broker's price target on Tenaris U.S.-listed shares is $42. The shares finished 0.9% higher at $38.34.

The Merval index rose 1% to 2,200.82, its first close above the 2,200 points level since late May 2008. Trading in Argentina was closed Monday for the Columbus Day holiday

Chile's IPSA ended 0.7% at 3,481.32. Investors late Tuesday will receive the central bank's latest decision on its key interest rate. Analysts polled by the central bank expect policymakers to keep the rate unchanged at 0.5%.

Mexico's IPC index reversed losses to finish up 0.4% at 30,611, adding to its 1.5% rise in the previous session. The index has climbed for eight consecutive sessions, leaving Mexico's benchmark up 36.8% since the start of 2009.