MEXICO CITY: Brazilian and Mexican stocks rose on Thursday after a US Federal Reserve official said investors may have over-reacted recently to the possibility of the central bank winding down its stimulus, which has fueled investors' appetite for risky assets.When asked in Boston whether anxiety that the Fed might dial down stimulus was overblown, Philadelphia Fed President Charles Plosser responded "maybe yes."
"Since I don't know what the outcome is going to be, the markets seem to take this very seriously at some level which I think is probably a mistake," said Plosser, a long-time critic of the quantitative easing program.
Stocks in Mexico, whose economy is deeply intertwined with the United States, rose 0.88 percent to 40,579, its first gain in four sessions, a day before the release on the key US unemployment figures.
"The market is trying ... to anticipate tomorrow. It's a true roller coaster. They don't know what position to take. Total uncertainty," said Jorge Gordillo, deputy director of analysis at CI Banco in Mexico City.
Gordillo added that Plosser's comments had boosted the IPC index on Thursday.
Brazil's Bovespa rose 0.16 percent to close at 52,884, despite the release of central bank minutes noting that annual inflation remains on an upward trend and its outlook is "unfavorable."
Earlier in the session, the Bovespa fell to levels not seen since July 2012, as the minutes plus a recent government decision to remove a financial transaction tax on fixed income investments drove investors away from equities into bonds.
Chile's bourse fell 0.57 percent at 4,168 points, dragged down by shares of airline Latam. The company's shareholders will meet on June 11 to discuss plans to raise one billion dollars in capital to boost finances. -Reuters
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