Mexican stocks halted a six-day decline on Friday, while Brazilian shares pared losses to end flat following comments from the head of the US Federal Reserve suggesting the scope for possible stimulus measures. Talk that the European Central Bank could set yield-band targets in a bond-buying scheme to rein in the euro zone debt crisis also boosted investor confidence.
The MSCI Latin American stock index ended the day 0.14 percent lower at 3,620.26. The index lost about 1.3 percent this week, its worst week since early June. Brazil's benchmark Bovespa index trimmed its losses after Fed Chairman Ben Bernanke said the US central bank has room to deliver "further action" to spur money markets. Meanwhile, telecommunications firm America Movil helped buoy Mexico's IPC index.
"It helped improve the mood out there," said Guido Chagas, a senior partner at Humaita Investments in Sao Paulo. "Next week, the markets will move off rumours about the roles of different central banks." Investors are expecting the European Central Bank to soon take decisive action to limit borrowing costs for troubled euro zone members. Setting a band for sovereign bond yields is an option gaining favour among central bankers, Reuters reported on Friday. But the decision would not be made before the ECB's September 6 policy meeting, sources said.
Market players will also remain focused on the Jackson Hole symposium next week, looking for a clearer signal of the Fed's potential action. Brazil's Bovespa slipped 0.15 percent to close at 58,425.76, closing the week down 1.1 percent - its second straight week of losses. Shares of homebuilder Gafisa rose 6.23 percent, and are up about 25 percent since the company reported an unexpected second-quarter profit.
Shares of iron ore producer Vale, which weighs heavily on the index, fell 0.79 percent. Mexico's IPC index snapped a six-day slide, rising 0.83 percent to 40,211.41. The index ended the week losing about 0.8 percent, marking its fourth straight week of losses. "It's had a bit of a minor retracement, with underperformance after a massive outperformance," said Fredrick Searby, a Latin American equity strategist at Deutsche Bank in New York.
The index hit record highs in late July, but it lost steam in August during a traditionally light-volume month as investors fret over the euro zone debt crisis and speculate over possible stimulus measures from central banks. Shares of America Movil, controlled by billionaire Carlos Slim, rose 1.88 percent as bargain hunters took advantage of an over 4-percent slide in the stock over the previous six sessions.
Spanish lender Banco Santander is looking to list its Mexican unit on the local exchange and in New York on September 25, a source close to the deal told Reuters. In Chile, the bluechip IPSA index edged lower for the fourth straight day, falling 0.41 percent to 4,188.11. The index closed 1.7 percent lower for this week.
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