LATIN AMERICAN MARKETS: Mexican Equities Pace Regional Advances

By Carla Mozee

Mexican equities led gains among Latin American benchmarks Monday, with help from gains in metals prices and from Wall Street, where positive movement in the housing sector offset news that thousands of people will be laid off from their jobs.

Mexico's IPC rose 1.2% to 19,583.08, roughly undoing Friday's loss of 1.2%.

Shares of copper miner Grupo Mexico led the index higher with their advance of 6.1% as copper futures rallied to $1.5865 a pound. Silver futures also rose, by 1.4% to $12.11 an ounce.

Shares of mining company Industrias Penoles rose 1.7%.

Also moving higher were shares of home builder Homex (HXM), up 4.8%, and real estate developer Corporacion Geo, up 5.5%.

In Brazil, shares of most steel makers posted gains. Companhia Vale do Rio (RIO) picked up 2.4%, Companhia Siderurgica Nacional (SID) ended up 1.4%, and Gerdau (GGB) rose 0.9%.

Shares of Argentine steel tube maker Tenaris (TS) rose 0.6%, aiding in a modest 0.1% advance for the Merval index.

On Wall Street, the S&P 500 Index (SPX) rose 0.3% and the Dow Jones Industrial Average (DJI) closed up 0.5%, reversing earlier declines.

"Markets globally managed to eke out small gains on Monday, bucking widespread news of job losses and rising pessimism regarding the timing/strength of any U.S. recovery," analysts at RBC Capital Markets wrote late Monday.

From the dismal U.S. housing market came a piece of bright data: Existing-home sales in December rose 6.5% as house hunters bought up more foreclosed homes. The National Association of Realtors said about 45% of the purchases were considered distress sales. Sales for 2008 dropped 13.1% to 4.91 million.

Meanwhile, analysts said that a pending $68 billion purchase of drug maker Wyeth (WYE) by its rival, Pfizer Inc. (PFE), indicates that banks appear more willing to participate in merger activity now that they've received funding from the government's financial-industry rescue package.

Up despite data

Stocks in Latin America and on Wall Street overcame declines prompted by a wave of layoff announcements from various companies, including wireless services provider Sprint Nextel (US-S). On Monday, the total amount of job losses surged to more than 50,000.

Investors in Mexico took in stride a report that total exports in December fell nearly 20% on a year-over-year basis, while imports fell nearly 13%.

"Mexico's export-driven economy remains particularly at risk to a pro-longed/deep U.S. recession," said RBC Capital Markets.

Retailer Wal-Mart de Mexico (WMMVY) rose 1.2%, wireless services provider America Movil (AMX) shares rose 1%, and fixed-line operator Telmex (TMX) ended up 1.8%.

Brazil rises

Brazil's Bovespa rose 1% to 38,509.45, from Friday's loss of 1.7%. The benchmark ended last week with a 3.1% decline.

Petroleo Brasileiro (PBR) shares rose 1.2% following the oil-giant's plan to invest $174.4 billion during 2009 through 2013. The amount set by Petrobras represents a 55% increase in capital expenditures from its 2008-2012 strategic plan.

"The plan is aggressive, but the values are maximum amounts, as Petrobras expects to renegotiate with suppliers," said analysts at Banif Primus in a note Monday.

Elsewhere in Brazil, economists surveyed by the central bank have eased their expectations for yearly inflation. The consumer price index is now expected to come in at 4.64% from last week's estimate of 4.8%.

Their forecast for gross domestic product in 2009 remained at 2%.

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