LatAm stocks head up, but tread in NY's footsteps
Reuters, Wednesday, September 02, 1998 at 14:21
By Noriko Yamaguchi
SAO PAULO, Sept 2 (Reuters) - Major Latin American markets
were heading for higher ground on Wednesday as investors in the
region fished for cheap blue-chips, but most players were still
jumpy, watching Wall Street, brokers said.
"The markets in the region could still be very volatile.
Prices may depend very much on Wall Street's outlook, but we
believe the Dow Jones is going through a short-term
consolidation," said Jorge Mariscal, Goldman Sachs' chief
investment strategist for Latin America.
Mariscal said global investors may start looking harder for
attractive buys in the region after Wall Street shares finish
their round of recoveries.
The MEXICAN bourse was leading the pack after shares played
catch-up on the Dow Jones industrial's steady rise. The IPC
index <.MXX> soared 7.5 percent in the first 40 minutes of
trade as bargain hunters dominated the scene.
The market had been closed on Tuesday for President Ernesto
Zedillo's State of the Nation address.
Meanwhile, the region's most liquid market, BRAZIL,
continued to head north at midday after the blue-chip Bovespa
index (INDEX:$BVSP.X) posted a handsome 6.87-percent jump at Tuesday's
end.
Some brokers said foreign funds began trickling into the
market Tuesday. The Bovespa climbed 2.7 percent to a high of
7,105 points in early trade.
Stocks in VENEZUELA were also running up in early trade,
with the 15-share IBC index <.IBC> trading 2.70 percent higher
than the previous day's close.
Some analysts said Venezuela could come under the spotlight
after neighboring Colombia decided to widen its exchange rate
band and allow for a steeper-than-planned depreciation of the
local currency. Colombia's peso had opened sharply lower
against the dollar Wednesday following the news.
"The next country that is going to be concerning a lot of
people is Venezuela, especially now that Colombia devalued,"
Miguel Diaz, Latin American strategist for Nikko Securities in
New York, said.
Colombia is Venezuela's second largest export market and
the news may put pressure on Venezuela to devalue its currency,
Diaz said.
But so far, Venezuelan markets were weathering negative
impacts, analysts said.
CHILE's stocks were seen firming on Wednesday on expected
gains in their American Depositary Receipts.
Local stocks were undervalued and while economic turmoil in
Russia and other emerging markets was far from over, there was
at least a break from the recent onslaught of bad news, traders
said.
The IPSA <.IPSA> index of the leading 40 shares was
slumping a bit by midday, but it had soared 4.58 percent to
65.12 points on Tuesday.
In ARGENTINA, stocks also opened firmer, but prices started
floating around Tuesday's close thereafter, as indecisive
traders monitored Wall Street's price movements. The blue-chip
Merval index <.MERV> slipped 0.1 percent by midday.
noriko.yamaguchi@reuters.com))
Copyright 1998, Reuters News Service |
