RIO DE JANEIRO, April 24 (UPI) -- Stocks were mostly up across Latin America in an abbreviated holiday week of trading. Relief that the war in Iraq seemed resolved with little difficulty, and solid domestic news buoyed investors.
U.S. Treasury Secretary John Snow toured the region this week and his words of encouragement in Brazil -- Latin America's biggest economy -- helped cheer investors who hope for better business relations with the United States.
The status of negotiations of the Free Trade Area of the Americas was a top item of discussion for Snow -- who visited Brazil Tuesday and Wednesday before heading to Ecuador and Colombia.
"We're prepared to put everything on the table. Agriculture clearly has to be one of the issues addressed in this hemisphere and on the world stage at the WTO (World Trade Organization)," Snow told officials in Brasilia.
Brazil has led efforts among emerging-market economies to coerce the United States into relenting on agricultural subsidies and tariffs -- the area where Latin American countries exporting raw goods most want to see some flexibility.
"We look forward to a very constructive and positive relationship with our great neighbor to the south," Snow said. "We have enormous opportunities before us, trade is one example. There is limitless potential for trade between our two countries."
Hopes of better relations with the United States and thoughts that two business-friendly presidential candidates might make it to the second round of voting as Argentines head to the ballot box this Sunday have pushed Brazilian and Argentine equities up this year.
Argentina's Merval stock index has jumped 43 percent since Jan. 1, while Brazil's Bovespa index has risen some 29 percent in the same period of time.
While a myriad of factors are contributing to gains, the overall driver is the sense that each country's new government is and will lead the region from the acute turbulence seen in 2002, as Argentina came off a huge default and Brazil seemed to be heading toward one.
But analysts warn neither Brazil or Argentina is remotely out of the dark just yet.
Brazil's new President Luiz Inacio Lula da Silva is fighting a pitched battle to push through reforms to the country's tax, legal and pension systems deemed absolutely necessary by investors.
And Argentina's fate will hinge upon its presidential election and the country's ability to restructure its debt woes, a complicated task that will require strong leadership from the next government.
As for the markets, Brazil's Bovespa index ended last Thursday up 2.92 percent at 12,395. Investors were heartened by state governors who said they would support tax and pension reform efforts. Wireless company Telesp Celular rose 7.9 percent. Long-distance carrier Embratel jumped 6.5 percent on news its parent company WorldCom won a debt re-organization plan.
Brazilian markets were closed for Good Friday, then were shuttered Monday for a national holiday commemorating the beginnings of revolution against Portugal.
Tuesday brought a gain of 0.46 percent to 12,452, despite a central bank poll forecasting higher-than-expected inflation. Investors fear that will force interest rates to remain at their current 26.5 percent level. Embratel rose 4 percent.
The Bovespa lost 0.47 percent to 12,394 Wednesday as profit taking took hold and investors frowned at the central bank's leaving the benchmark interest rate unchanged. Bradesco bank rose 1.08 percent in heavy trade, while Embratel plunged 6.07 percent. Aircraft maker Embraer lost 4.73 percent.
Mexico's markets were closed Thursday and Friday for Holy Week.
On Monday, the country's IPC index rose 0.32 percent to 6,327 in light trade. Wireless giant America Movil rose 1.36 percent. Investors were expecting a strong earnings report from the company after the bell Wednesday.
The IPC gained 0.75 percent to 6,374 Tuesday, as investors looked for a strong earnings season to begin. Telmex -- Latin America's largest fixed-line phone company -- gained 0.43 percent, while its sister company America Movil added 1.96 percent.
Wednesday brought a slight gain to 6,385 for the IPC. Industrial group Alfa gained 1.8 percent in heavy trade, retailer Elektra rose 3.6 percent.
In Chile, the IPSA rose 1.06 percent to 1,086 Thursday, its seventh consecutive session of gains. Investors have been buoyed by solid economic indicators, and a currency holding at 3-month lows. Electricity generating companies led the way, with Endesa up 2.1 percent and Colbun gaining 1.5 percent after the government gave a green light to price hikes.
Chile's markets were closed for Good Friday.
On Monday, the IPSA rose 0.27 percent to 1,089 as President Ricardo Lagos said the economy would grow by 4 percent in the first quarter. Retailers did well, with Almacenes Paris up 3.6 percent and Parque Arauco rising 2.33 percent.
Profit taking led to a 0.56 percent loss to 1,083 Tuesday. Energy company Enersis dropped nearly 1 percent, while Colbun fell 1.34 percent. Winemaker Concha y Toro fell 5.45 percent.
The IPSA added 1.83 percent to 1,103 Wednesday. Endesa climbed 2.1 percent, supermarket chain D&S rose 2.8 percent, and retailer Falabella gained 3.63 percent.
Argentina's markets were closed Thursday and Friday for Holy Week.
On Monday, the country's Merval index gained nicely, rising 6.7 percent to 640.9. Investors cheered a presidential elections poll showing the conservative economist Ricardo Lopez-Murphy gaining ground on his rivals, former President Carlos Menem and provincial governor Nestor Kirchner.
Tuesday brought a gain of 1.34 percent to 649.5, the Merval's highest level in nearly five years.
Investors have been gaining in optimism with the thought that the country's next president will be business-friendly and won't bring immediate turbulence to the economy.
Wednesday saw a gain of 3.16 percent to 670 for the Merval as investors rode the wave of high hopes. Steelmaker Acindar gained 2.47 percent, Banco Frances added 6.94 percent, and Telecom Argentina rose more than 12 percent.
In Venezuela, the IBC index was closed Thursday and Friday for the holiday. Monday brought a slight gain to 8,465, followed Tuesday by a loss to 8,417. The IBC closed flat Wednesday at 8,418.
