Stocks in Latin American mostly rose on Friday on data showing a surge in factory activity in China, a key consumer of the region's raw materials, but uncertainty over the outcome of US budget negotiations kept markets in check. Brazil's benchmark Bovespa index rose 0.49 percent after data showed that China's vast manufacturing sector expanded in December at its fastest pace in 14 months, lifting the outlook for commodities producers.
Iron ore giant Vale jumped 3.17 percent while state oil firm Petrobras rose 3.27 percent. China is Brazil's top trading partner. Mexico's IPC index gained 0.1 percent, mostly on a 2.56 percent gain in copper miner Grupo Mexico. "The Chinese data encouraged investors a little, but risk aversion still prevails," said Eduardo Velho, chief economist with Planner brokerage in Sao Paulo.
"Investors will likely remain cautious while there are no clear signs of progress in the negotiations to avoid the 'fiscal cliff' in the United States," he added. In the past few days, frustration over a lack of progress in US budget negotiations has driven investors increasingly to the sidelines. They fear that growth in the world's largest economy could be derailed next year if US lawmakers fail to agree on a plan to avoid the "fiscal cliff" of steep spending cuts and tax hikes that are scheduled to begin taking effect in 2013.
Mexican retailer and beverage company Femsa rose 1.08 percent after its Coca-Cola bottling unit, the world's largest coke bottler, said it will buy a 51 percent stake in Coca-Cola Co's Philippine bottling operations for $688.5 million in cash. In Chile, the bluechip IPSA index rose 0.76 percent on a 1.38 percent gain in retailer Falabella.
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