In Brazil and Latin American in general shares moved broadly higher today, July 6, partly due to bargain hunting following steep slides yesterday.
Mexico paved the way in gains, as the more conservative candidate won the official election results in an extremely tight election; although, it could be another two months before the election results are completely validated. Meanwhile, all eyes will likely be on tomorrow’s U.S. employment report.
Brazil’s Bovespa Index rose 155.10 points, or 0.43%. Mexico’s benchmark Bolsa surged 533.00 points, or 2.73%, while Argentina’s Merval Index rose 14.21 points, or 0.84%.
Brazilian shares managed to reclaim some of the steep losses incurred during yesterday’s trading. Investors were cheered by some downbeat economic news from the U.S., which signaled to some that the interest rate tightening cycle could be nearing an end.
The Institute for Supply Management said its headline services sector figure fell a stronger-than-expected amount to 57% in June from 60.1% in May.
On the local economic front, the Brazilian Census Bureau, or IBGE, said that industrial output rose 4.8% in May compared to a year ago, and increased a higher than expected 1.6% month over month. The most recent result was bolstered by a jump in automotive production.
Meanwhile, the Brazilian Motor Vehicle Manufacturers Association, or Anfavea, said that June’s motor vehicle production fell 6.7% from May to 225,831 units. The most recent figure slid 1.5% from the year-ago figure.
Mexican shares rallied on the session, as market friendly Felipe Calderon won the official count for Mexico’s presidential rate. Calderon won 35.88% of the 41 million votes counted, while Lopez Obrador won 35.31%.
Nevertheless, rival Andrés Manuel Lopez Obrador also claimed victory and warned he would challenge the results at the Federal Electoral Tribunal. The tribunal has until September 6 to investigate voting irregularities.
Elsewhere, Argentine issues followed the broader regional markets higher, while there were limited corporate or economic reports to direct trading.
Thomson Financial – www.thomsonfinancial.com