EMERGING MARKETS-Fed bets lift Mexican stocks, Vale weighs

* Bovespa down 0.35 pct, Mexico’s IPC up 0.32 pct

* Vale down after announcing investment plan

* Mexican, Chilean bourses close at historical highs
(Adds commentary, updates prices to close)

By Caroline Stauffer and Felipe Iturrieta;

MEXICO CITY/SANTIAGO, Oct 28 (BestGrowthStock) – Investors betting
on a cash injection from the U.S. Federal Reserve found Mexican
stocks attractive on Thursday while an investment plan from
mining giant Vale weighed on Brazil’s bourse.

Expectations the Fed will announce plans to buy U.S.
Treasury bonds and keep rates low next week have boosted higher
yielding assets like Latin American stocks. A survey on
Thursday found the stimulus could be larger than expected.

The MSCI Latin American stocks index (.MILA00000PUS: ) edged
up 0.02 percent. Mexico’s IPC index (.MXX: ) outperformed other
regional bourses, adding 0.32 percent to close at a new
all-time high.

“There are factors favoring Mexico as investors search for
higher yields in Latin America,” said Jaime Aguilera, an equity
strategist at HSBC in Mexico City.

“The threat of inflation (in Mexico) is now seen as very
low and with U.S. and Brazil in election mode, there is less
uncertainty in Mexico,” he said.

Mexico’s central bank on Wednesday sharply cut its
inflation forecast for early 2011. [ID:nN27141218]

On the Mexican stock exchange, Mexichem (MEXCHEM.MX: ), which
produces basic chemicals at various sites in Latin America,
rose 3.06 percent after reporting late on Wednesday its profits
doubled in the third quarter from a year earlier.

Brazil’s Bovespa (.BVSP: ) lost 0.35 percent, hurt by losses
in top-weighted mining giant Vale and credit card operator

Vale (VALE5.SA: ) fell 1.68 percent after announcing a plan
to invest a record $24 billion in 2011 as it diversifies toward
pricier metals and profitable fertilizers. [ID:nN28187829]

BTG Pactual analyst Edmo Chagas said there is “limited
upside” for higher dividends.

Redecard (RDCD3.SA: ), Brazil’s second-largest credit card
operator, plunged 5.7 percent after reporting a surprise fall
in third-quarter profit (Read more your timing to make a profit.). [ID:nN27247153]

Shares in Usiminas (USIM5.SA: ), Brazil’s biggest producer of
flat steel, led index gains and surged 4.54 percent after the
company posted a surprising 14 percent jump in third-quarter
profit. [ID:nN28240766]

Gerdau (GGBR4.SA: ), another Brazilian steelmaker, rose 3.67

Chile’s blue-chip IPSA index (.IPSA: ) added 0.17 percent to
close at 4885, its third record close in a row.

“Retail continues to be the main driver,” said Arturo
Curtze, a trader at BBVA Brokerage in Santiago. “High profit
expectations for the third quarter are pushing the market and
retail stocks should keep rising.”

Retailer Cencosud (CEN.SN: ) rose 2.26 percent while rival
Falabella (FAL.SN: ) added 0.99 percent.
(Additional reporting by Alvaro Tapia in Santiago and
Guillermo Parra Bernal in Sao Paulo; Editing by Diane Craft)

EMERGING MARKETS-Fed bets lift Mexican stocks, Vale weighs