By Carla Mozee
Latin American equities were mixed Wednesday, with Brazil's
benchmark edging higher before a decision on interest rates by the
country's central bank.
Brazil's Bovespa was last up 0.3% at 38.890.02, paced by a 4%
gain in shares of Telecomunicacoes de Sao Paulo (TSP).
Shares of the most interest-rate sensitive banks fell. Banco
Itau (ITU) was down 1.4%, Unibanco (UBB) lost 2.1%, and Bradesco
(BBD) fell 1.3%.
Banco Nossa shares, however, were up 0.14%. Banco do Brasil
gained 0.9%. The federally-run bank's planned $5.39 billion
purchase of Nossa Caixa, run by the Sao Paulo state government, was
approved by the central bank on Tuesday.
Ahead of the rate decision, due Wednesday night, Brazil's census
bureau said consumer prices rose 0.55% in February, compared with a
0.48% rise in January, because of a seasonal adjustment in tuition
fees. The reading was above the estimate of 0.52% produced by a
survey of analysts conducted by Dow Jones Newswires. Excluding the
change, consumer prices rose 0.24%.
Inflation in February on a 12-month basis was 5.9%, compared
with a 5.84% rate in January.
The consumer price figures arrived on the heels of Tuesday's
report that the economy grew just 1.3% in the fourth quarter of
2008 from the year-ago period, below the forecast for gross
domestic product growth of 1.64%.
"In all, [fourth-quarter] GDP results confirmed the dismal
performance partly depicted by high frequency data observed in the
last few months," wrote UBS Pactual analyst Claudio Ferraz in a
note Wednesday.
The broker expects the central bank to cut the benchmark
interest rate by a full percentage point from the current Selic
rate of 12.75%.
A number of market professionals since last week have raised
their bets for a rate cut of at least 150 basis points.
The iShares MSCI Brazil Index Fund (EWZ), an exchange-traded
fund, slipped 0.14%.
In Mexico, the IPC was up 1.2% to 17,748.36, led by an 8% jump
in shares of Grupo Financiero Banorte and a 5% rise in shares of
broadcaster Grupo Televisa (TV).
Argentina's Merval slipped 0.6% to 987.08.
Chile's IPSA shed 0.5% to 2,468.05. The country's central bank
is scheduled to release its decision on interest rates
Thursday.