Latin American stocks edged higher on Friday after weaker-than-expected US economic data undermined confidence that the outlook for the world's largest economy is improving. The MSCI Latin American stock index added 0.16 percent, gaining 0.44 percent for the week. US industrial production was unchanged in February and consumer sentiment dipped in early March. Both gauges had been expected to rise.
"With the US data that came out today and oil prices high, investors were a bit more cautious," said Raphael Martello, an economist with Tendencias Consultoria in Sao Paulo. "People are waiting for more concrete news, the kind of data that boosts projections for the future, and we didn't have much of that today." Brazil's Bovespa has gained over 19 percent this year after slipping 18 percent in 2011, leading some analysts to question whether the current rally has run its course.
Brazil's benchmark Bovespa stock index slipped 0.14 percent to 68,6754.88, advancing 1.4 percent this week. PDG Realty, Brazil's biggest homebuilder, declined 2.73 percent, while Brazil's No 2 builder, Cyrela Brazil Realty, dropped 2.96 percent. Phone company Telefonica Brasil gained 1.56 percent after the company on Thursday approved a restructuring plan through which it will fully integrate its wholly owned subsidiaries into the parent company.
Stocks fell on Thursday after Brazil's central bank gave an interest rate outlook that was slightly above what the market had been expecting. In Mexico, the IPC index rose for a second consecutive session, gaining 0.32 percent to 38,258. The index logged a 1.5 percent weekly gain, its best since early February. But it has been trading near record highs this month and been unable to break 38,500 points.
America Movil, the telecommunications company controlled by billionaire Carlos Slim, added 1.99 percent, while retailer Wal-Mart Mexico rose 1.46 percent. Chile's IPSA stock index posted a seventh straight session of modest gains, inching up 0.12 percent, though technical indicators signalled a recent rally could be weakening. The index's highs have risen since February while the highs of its relative strength index have fallen, a trend known as bearish divergence that often precedes the end of a rally.