By Carla Mozee

Mexican stocks finished higher Monday, supported by a report of easing inflation and by another report showing a rise in monthly home sales in the U.S., Mexico's largest trading partner.

Mexico's IPC equity index closed up 0.4% at 30,759.48.

Brazil's Bovespa index, however, gave up gains to fall 0.6% to 59,915.41.

In Chile, the IPSA fell 0.2% to 3,774.86.

Among exchange-traded funds, the iShares MSCI Brazil Index Fund (EWZ) reversed course to log a 1.4% loss. The iShares MSCI Mexico Index Fund (EWW) also turned lower, by 0.4%.

The indexes in Mexico and Brazil on Friday each snapped a string of six losing sessions, during which fears of contagion from Europe's debt crisis fueled a flight-for-safety bid among investors. The last time the IPC fell six sessions in a row was in late October 2009. The Bovespa's latest losing streak was its longest since early October 2008.

But the markets during Monday's session were able to trade higher in the wake of this weekend's takeover by Bank of Spain of a struggling regional savings bank, CajaSur. However, the euro resumed its slide against the U.S. dollar.

Brazil's currency gave up earlier ground to end at 1.866 reals (CUR_USDBRL) per greenback, compared with Friday's close at 1.856 reals. Mexico's peso (CUR_USDMXN) also turned lower to trade at 12.989 after Friday's finish at 12.962.

Earlier Monday, the National Association of Realtors said U.S. sales of existing homes rose 7.6% to a seasonally adjusted annual rate of 5.77 million, with buyers working to beat tax-credit expiration deadline. Sales had been expected to rise to 5.63 million.

Investors in Mexican assets have been watching for improvement in the U.S. economy because Mexico sends more than 80% of its products to the U.S.

In trading in Mexico City, shares of Cemex (CX) rose 1.2%. The cement giant counts the U.S. as one of its key markets. The IPC index also benefited from a rise in mining, retail, home building and finance stocks.

Meanwhile, Mexico's central bank said consumer prices through the first two weeks of May fell 0.54%, better than the market forecast for a decline of 0.27%, led by a fall in prices for vegetables and fruits and electricity.

The reading puts annual inflation at 3.93%, down from 4.27% at the end of April. The report comes after Friday's decision by the central bank to hold its key interest rate steady at 4.5%, and supports projections by analysts who expect policy makers to leave the rate unchanged at their next meeting.

While the reaction in the rates market was positive after the consumer-prices report, an optimistic view of the data isn't warranted, wrote Jimena Zuniga, an economist at Barclays Capital in a note, with "the low-side surprise in the headline print practically exclusively caused by a decline in the very volatile series of fruit and vegetable prices."

In Brazil, the central bank's weekly survey of analysts show they continue to expect a rise in inflation this year as the economy remains on its expansionary track. Analysts, on average, expect the economy to grow by 6.46%, up from 6.3% last week. It's the tenth straight survey to elevate growth projections.

Inflation as measured by the IPCA index is forecast to end at 5.67%, still above the central bank's current target of 4.5%.