Stocks across Latin America were mixed this week as profit taking hit some of the markets.
Emerging market equities around the globe continue riding high on the whole, however, and Latin American equities have been no exception.
Brazil, Argentina and Mexico have seen record highs in the past weeks.
Analysts say that political risks in the region are lowering, while solid global liquidity is providing the fuel to keep Latin American stocks climbing.
While profit taking has been seen in some of the markets, analysts say that it doesn't seem to pose a threat to the chances for further growth this year.
That said, there is some differentiation among the Latin American markets, with Brazil seen by most investors as having plenty of room for gains while Mexico looks more likely to see slower growth in the short term.
The macroeconomic picture of Latin America is looking better than it has in years, with low inflation and stable exchange rates blessing markets. Growing domestic consumer demand is also helping.
Credit rating agencies have backed this solid economic portrait, giving several debt upgrades to countries in the region in the past two months.
But threats do remain, and the largest of them seems to be a rise in U.S. interest rates, which would divert investors' cash from Latin America to the more secure bet of U.S. debt.
A slowdown in China -- which has become a big buyer of Latin American commodities -- or a change in the country's currency could also pose problems.
This week saw Brazil and Venezuela sign a series of bilateral trade deals and an agreement to jointly develop a $2.7 billion offshore natural gas project.
That is good news for Venezuelan President Hugo Chavez, who has sought to increase the economic stature of his country within South America. Teaming with the region's biggest economy should help him do just that.
In Brazil, the central bank on Wednesday hiked the key interest rate by half a percentage point to 18.75 percent, a 16-month high.
That was the bank's sixth rate hike in a row as officials look to keep a lid on inflation.
The rate increase came on the back of surging economic activity and growing consumer confidence in the country. Central bank officials are worried that the economy will heat up too quickly and spark an increase in prices.
The bank has set an inflation target of 5.1 percent this year, but inflation was at 7.4 percent for the 12 months ending in January.
The market is expecting inflation of about 5.7 percent this year.
The interest rate hikes have increased the pressure on the government from the business sector, which says the high rates are choking off growth. Many businesses might want to expand, but credit is simply too expensive for them to take out loans.
For the week, Brazil's Bovespa stock index gained 77 points to close Wednesday at 26,384.
Mexico's economy grew 4.4 percent last year, its fastest expansion in four years.
The Finance Ministry said Wednesday that fourth-quarter growth of 4.9 percent greatly aided the total for the year.
Industrial production, which rose 3.8 percent last year after three years of declines, was a big reason for the solid showing. Mexico was helped by an increase in the manufacturing activity of the United States, the destination for the vast majority of Mexico's manufacturing exports.
The services sector jumped 4.8 percent on the year, while the agriculture sector increased 4 percent.
The economic numbers are good news for President Vicente Fox, who came to office in 2000 promising growth of 7 percent a year. Until last year, Fox's time in office had only seen mild growth.
For this year, the government is forecasting modest growth of 3.8 percent, in line with the general feeling that worldwide economic expansion will be lower than last year.
For the week, Mexico's IPC stock index lost 21 points to end at 13,641.
A central bank survey in Argentina indicates that the manufacturing sector likely saw solid growth in January, extending big gains from 2004.
The survey of private economists forecast a jump in industrial output of 8 percent from the same month a year earlier. The central bank forecast had been for 7.5 percent growth.
December saw a year-on-year gain of 9.6 percent, which surprised the market with its strength.
Analysts say the economic numbers Argentina produces this year will be more closely watched than last year.
The reason is that this year's numbers will be compared to 2004, the first strong base year the country has seen in some time. While economic indicators saw big increases in 2004, it hinged on the fact that those numbers were compared to 2003, when the economy was still lagging from the 2001 government default.
Also this week, the government said preliminary data shows December's gross domestic product likely increased 9.2 percent. The market forecast was 8.3 percent.
For the week, Argentina's Merval stock index gained 24 points to close at 1,509.
Chile saw its copper exports jump 42 percent in January, brining in $1.17 billion in revenue. During the same month a year earlier, exports were $823 million.
Strong prices for copper were the main reason for the increase.
In 2004, copper exports rose 92 percent on the back of those strong prices, brining in $14.34 billion.
Strong demand from China and other Asian economies is principally driving the surge in copper prices. That has greatly fueled Chile's economy, which increased 5.9 percent last year. That was the country's highest growth rate in seven years.
Chile's IPSA stock index ticked up just 1 point to end at 1,827.
Venezuela's economy expanded by a record 17.3 percent in 2004 as the construction sector led the way.
The country's central bank said the non-oil economy grew by 17.8 percent, while the oil industry jumped 8.7 percent.
Oil makes up about half of the country's revenues and 80 percent of its exports.
The construction sector grew nearly 32 percent, while the manufacturing industry expanded 25.7 percent.
The growth is impressive, analysts said, but somewhat misleading as it is being compared to the paltry base year of 2003, when the economy saw a steep contraction.
Also, economists point out that much of the growth came on the back of government spending, as oil revenues allowed for much state spending. Should oil revenues dry up, the rest of the economy would likely contract sharply.
Venezuela's IBC stock index lost 90 points to close at 29,615.
Colombian President Alvaro Uribe visited Venezuela this week to ease tensions in a diplomatic spat that has affected trade between the two nations.
The row was set off when Colombia hired bounty hunters to capture a prominent rebel who was hiding out in Venezuela's capitol.
Venezuelan President Hugo Chavez said the action violated Venezuelan sovereignty and he promptly cut diplomatic and economic ties with the nation.
But after Uribe's visit, Chavez said that commercial and trade agreements between the two nations would resume.
Uribe told reporters that he and Chavez agreed that they need to have a stronger commitment to patrolling the nations' common border, so that rebels from Colombia cannot seek refuge in Venezuela.
Most importantly on the economic front, the resumption of ties will allow construction of a gas pipeline between the two countries to continue.
For the week, Colombia's IGBC stock index added 94 points to end at 4,852.
