EMERGING MARKETS-Latam stocks hit 2-1/2 year, pullback seen

* Chilean stocks lead gains after strong growth data

* Vale CEO pick could help ease tensions with government

* Brazil Bovespa up 0.19 pct, Mexico IPC down 0.19 pct

By Luciana Lopez and Michael O’Boyle

SAO PAULO/MEXICO CITY, April 5 (Reuters) – Latin American
stocks rose to their highest since June 2008 on Tuesday, but
profit-taking in Mexico and signs Chile’s rally may be running
out of steam could limit gains in the coming sessions.

The MSCI Latin American stocks index (.MILA00000PUS: Quote, Profile, Research) rose
0.42 percent, extending a rally seen since mid-March.

Investors bet a move on Tuesday by China to tighten
borrowing costs would help manage to tame strong growth without
undermining high prices for Latin America’s key commodities.

“China will keep growing, just at a slower pace,” said
Gerardo Copca, a strategist at consultancy Metanalisis.

China is Brazil’s top trading partner and also one of
Chile’s top customers for its copper.

Chilean stocks led gains in major regional markets, with
the IPSA index (.IPSA: Quote, Profile, Research) rising 0.56 percent to close at its
highest since late January as industrial conglomerate Copec
(CPO.SN: Quote, Profile, Research) rose 1.99 percent.

Surprisingly strong growth data in Chile backed bets that
the country’s stocks could see solid profit growth during the
first quarter. [ID:nN05100042]

However, the IPSA’s relative strength index hit a level
that suggested it was overbought, which could push some
investors to take profits in the coming sessions. The RSI is
used in technical analysis to gauge an asset’s momentum.

In Brazil, Adriano Moreno, a strategist with Futura
Investimentos, said flows into Latin America had stabilized
after foreign investors pulled out of emerging markets during
the first quarter of the year to return to developed markets.

Brazilian stocks lagged other major markets in Latin
America last year, but high hopes for corporate profits this
year were now buoying stocks, he said.

“Generally, there’s a more optimistic climate,” Moreno

Brazil’s benchmark Bovespa stock index (.BVSP: Quote, Profile, Research) rose 0.19
percent to close at its highest since January.

The gauge’s 14-day simple moving average crossed over its
200-day simple moving average following a strong rally.
Brazil’s relative strength indicator has more room before
reaching overbought territory.

Shares of mining company Vale drew heavy volume on news of
a new chief executive pick, but its shares edged up only 0.12
percent. (VALE5.SA: Quote, Profile, Research) [ID:nN0596875]

Vale named former company executive Murilo Ferreira to
replace Roger Agnelli, whose relationship with the government
soured as politicians said the company does not do enough to
invest in Brazil.

“(Ferreira) was well regarded by the market, because it is
clear he is not wholly just a political appointment, he has
worked in various areas of Vale,” said Jose Goes, an analyst at
Win Trade, the online broker of brokerage Alpes.

Mexico’s IPC index (.MXX: Quote, Profile, Research) fell 0.19 percent to 37,832.96.
The IPC hit resistance at 38,000 points after a near-7 percent
jump since March 18.

“This is healthy profit-taking. We need a pullback in order
to be able to make further gains,” Metanalisis’ Copca said.

Analysts said a break above 38,100 to 38,200 in the coming
days would be needed to suggest the index could rise further
toward its all-time high set in January.

If the resistance levels cannot be broken in the short
term, investors could look to take more profits, analysts

Shares of top Mexican broadcaster Televisa (TLVACPO.MX: Quote, Profile, Research)
fell 2.67 percent, hurt by speculation it could pay too much to
get a stake in the country’s mobile phone markets.

Televisa said on Tuesday it was in talks with cell phone
operator Grupo Iusacell. [ID: nN05247593]
(Additional reporting by Brad Haynes in Santiago; Editing by
Dan Grebler)

EMERGING MARKETS-Latam stocks hit 2-1/2 year, pullback seen