By Carla Mozee
Mexican equities snapped a two-session losing streak on
Wednesday, with home builders finding support from comments by a
major ratings agency about stabilization in the sector.
Equities in the region largely held on to gains after minutes
released from the U.S. Federal Reserve's most recent meeting showed
policy makers are more confident that the downturn in the economy
is nearing an end, but remain unsure about the strength of
recovery.
Investors also appeared to have set aside a report that the U.S.
private sector shed 298,000 jobs in August, as well as a separate
government report that factory orders rose by a less-than-expected
1.3% in July.
Mexico's IPC equity index rose 0.7% to 27,953.34, as investors
hunted for bargains following two sessions of declines that had
resulted in a 3% fall in the benchmark.
Mining stocks led advancers, with shares of Grupo Mexico up
4.5%. They added to their 14% surge from the previous session after
a judge's ruling puts the company closer to regaining control of
Asarco LLC, an Arizona mining company that it had lost control of
in 2005 in the wake of Asarco's bankruptcy filing.
Miner Industrias Penoles rose 5.5%, and Compania Minera Autlan
gained 0.8%.
Shares of home builder Desarrolladora Homex (HXM) advanced 3.4%
and Urbi Desarrollos rose 1% after Moody's Investors Service said
it has a stable outlook on the Mexican housing sector as it's "well
positioned to weather the recession over the intermediate
term."
Mexican housing prices, unlike in the U.S., have remained stable
and continue to trend with inflation, said Moody's, while demand
for housing, particularly in the low-income category, continues to
be robust.
"A full recovery will, however, depend on the future health of
the Mexican economy and the government's continued support of the
housing sector," wrote Griselda Bisonó, an analyst at Moody's, in
a report.
Shares of home builder Consorcio Ara, however, slipped 0.3%.
Following the release of the Federal Reserve minutes, Brazil's
Bovespa had been on track to post a modest increase but it ended
with a loss of 0.8% at 55,385.72. It was the benchmark's fifth
decline in a row.
But the overall loss on the index was capped by a 1.7% rise in
shares of market heavyweight Petrobras (PBR) after BP (BP) said it
made a "giant" discovery of oil in the Gulf of Mexico. Petrobras
said in a statement that its Petrobras America subsidiary holds a
20% stake in the project. ConocoPhillips (COP) holds an 18% stake
and BP has a 62% stake.
Shares of JBS rose 1.7% ahead of a Wall Street Journal report
late Wednesday that the meatpacker plans to purchase U.S.-based
poultry provider Pilgrim's Pride Corp. (PPC) in a deal worth more
than $2 billion. Pilgrim's Pride is reorganizing under Chapter 11
bankruptcy law. The deal is reportedly in the final stages and
could still fall apart. If completed, the deal could be announced
as early as next week, according to the Journal.
JBS USA Holdings, a unit of JBS, in late July filed for a $2
billion initial public offering, and is seeking to be listed on the
New York Stock Exchange.
Meanwhile, sugar and ethanol producer Cosan was upgraded to
overweight from neutral at HSBC Global Research. The broker also
raised its price targets on Cosan's U.S.-listed shares (CZZ) to $11
from $4.50, and Cosan's shares traded in Sao Paulo, saying in part
that global sugar fundamentals should remain strong in fiscal 2010
ending in March, and in fiscal year 2011.
Cosan's locally traded shares shed 0.8%.
Market players had also awaited a decision by the Brazilian
central bank on interest rates, and late Wednesday policy makers
met market expectations by holding the Selic rate unchanged at
8.75%.
Chile's IPSA rose 0.4% to 3,146.63, and Argentina's Merval rose
0.5% to 1,755.22.
On Wall Street, the S&P 500 Index (SPX) fell 0.3% to 994.75,
and the Dow Jones Industrial Average (DJI) fell 0.3% at
9,280.67.