Latin American stocks were mixed on Friday on cautious optimism Spain is preparing to request an international sovereign aid package, which could help stem the spread of the euro zone's debt crisis and support demand for riskier assets. The MSCI Latin American stock index returned the previous session's losses, gaining 0.49 percent to 3,768.15, though finding resistance at its 200-day simple moving average.
Banking shares drove Brazil's benchmark Bovespa index to its biggest gain of the week, while data showing a greater-than-expected rise in Mexico's jobless rate weighed on the country's IPC index. Brazilian shares rose early in the session on a report that Spain is considering freezing pensions and speeding up a planned rise in the retirement age to meet conditions of an expected international sovereign aid package, though the Spanish deputy prime minister later denied the report.
"The market bought into the idea that Spain is preparing to ask for international help," said Pedro Paulo da Silveira, an economist with Tov Corretora in Sao Paulo. "If it doesn't ask for a bailout, it will most likely end up defaulting." Brazil's Bovespa rose 0.51 percent to 62,002.12, though a technical indicator known as the relative strength index approached "overbought" territory, indicating gains may be limited.
Shares of Itaú Unibanco, Brazil's largest non-government bank, rose 1.58 percent, contributing most to the index's gains, while those of rival Banco Bradesco added 1.7 percent. Oil firms also gained, with shares of OGX, the oil company controlled by Brazilian billionaire Eike Batista, up 1.1 percent and those of state-controlled firm Petrobras climbing 0.65 percent.
JBS, the world's largest meat processor, rose 3.35 percent after Reuters reported on Thursday that the company is close to purchasing rival firm Independencia. Investors pumped $762.5 million into US-based Latin American-focused mutual funds in the week ending September 19, the biggest weekly flow since October 2010, according to Lipper. Strategists at Santander Investment Securities also said in a report that, based on EPFR data, foreign investors were the main buyers of equities in Brazil's Bovespa stock exchange, followed by local institutional investors.
"Institutional investors have a long-term focus. They are looking at the Bovespa, seeing a good value, and putting together more long-term strategies based on fundamentals," said Fabio Goncalves, an analyst with Banrisul Corretora in Porto Alegre, Brazil. "Foreign funds are very sensitive, though," Goncalves said, adding that if developed markets start to present better-than-average performance, or if commodities prices start to drop, those flows will reverse.
Mexico's IPC index slipped for the second straight session, losing 0.14 percent to 40,442.73. Mexico's jobless rate rose in August, breaking a five-month streak of declines and adding to expectations of a deceleration in Latin America's second-largest economy in the second half of 2012. The news weighed on shares of banks and retailers, with shares of Wal-Mart de Mexico down 0.6 percent and those of lender Grupo Financiero Banorte slipping 1.53 percent. Chile's IPSA index gained for the third session in four, rising 0.34 percent to 4,224.37.