EMERGING MARKETS-Fed hopes, Q3 earnings views help Latam stocks

* Investors eye Q3 earnings reports, now trickling out

* Mexico’s IPC index notches record high

* Brazil’s Bovespa adds 1.3 percent, IPC up 1.1 percent
(Updates to afternoon)

By Luciana Lopez and Caroline Stauffer

SAO PAULO/MEXICO CITY, Oct 13 (BestGrowthStock) – Latin American
stocks hit their highest mark in more than two years on
Wednesday on hopes for a strong earnings season and greater
liquidity from the U.S. Federal Reserve.

The MSCI Latin American stocks index (.MILA00000PUS: ) jumped
2.11 percent, tracking what could be its best single-day gain
in a month.

That advance took the index to its highest intraday level
since July 1, 2008 — months before the failure of Lehman
Brothers in September of that year

Regional bourses also shot up: Mexico’s IPC (.MXX: ) notched
a record high at 34,902.940 points, and Brazil’s Bovespa
(.BVSP: ) rebounded to its levels of early April.

“The IPC has 35,000 as its next objective, helped by a
strong industrial production figure in Mexico yesterday and
expectations of strong third quarter earnings reports in Mexico
and the United States,” said Jaime Aguilera, an equity
strategist at HSBC in Mexico City.

“Expectations of increased liquidity from the Fed continue
to be the most important driver.”

Fed meeting minutes released on Tuesday showed that
policy-makers had a “sense that (more) accommodation may be
appropriate before long.” For details, see [ID:nN12191658]

Any moves by the Fed to spur growth in the world’s largest
economy could ultimately benefit emerging markets as well, with
money borrowed cheaply there invested in higher-yielding assets
throughout the world, the so-called carry trade.

Expectations of more liquidity, whether from the Fed or
other global central banks, help stocks, said Dany Rappaport,
partner in InvestPort financial consultancy.

A strong earnings season could also help Latin American

In Mexico, retail giant Walmex (WALMEXV.MX: ) said on Monday
its third-quarter earnings rose. [ID:nN11128720] Its shares
edged up 0.29 percent on Wednesday.

Commodities also advanced, with the Reuters-Jefferies index
moving up (.CRB: ). Many companies in Latin America are closely
linked to trade in raw materials.

“The risk sentiment in markets is obvious as crude oil is
trading up along with copper and gold,” Scotia Capital analysts
wrote in a report.

Miner Grupo Mexico (GMEXICOB.MX: ) advanced 2.05 percent, as
Penoles (PENOLES.MX: ) rose 2.76 percent. The miner’s Fresnillo
(FRES.L) precious metals unit said on Wednesday it undertook
record production of silver and gold in the third quarter.

Brazil’s Vale (VALE5.SA: ), the world’s largest producer of
iron ore, climbed 0.74 percent.

But shares of Brazilian energy giant Petrobras (PETR4.SA: )
slipped 0.74 percent, despite a jump in oil prices.

That stock has struggled after last month’s $70 billion
share offering, the biggest in world history, with investors
still leery of the company’s future and the possibility of
growing state control.

Brazilian homebuilders advanced, helped by a bright outlook
for growth this year in Latin America’s biggest economy. PDG
Realty (PDGR3.SA: ) jumped 3.84 percent, Gafisa (GFSA3.SA: )
climbed 4.36 percent, Cyrela (CYRE3.SA: ) gained 2.41 percent and
Rossi Residencial (RSID3.SA: ) moved up 6.27 percent.

Goldman Sachs strategist Stephen Graham is recommending
investors cut their holdings of Brazilian retail and
consumer-goods stocks and buy shares of commodity producers,
financial companies, homebuilders and transport companies.

In Chile, the blue-chip IPSA stock index (.IPSA: ) gained
2.44 percent and was set to snap its worst six-day slide since
November 2009 after a four-month rally that added 25 percent to
the index.

Falabella (FAL.SN: ) advanced 2.5 percent while fellow
retailer Cencosud (CEN.SN: ) gained 3.93 percent.
(Editing by Padraic Cassidy)

EMERGING MARKETS-Fed hopes, Q3 earnings views help Latam stocks