EMERGING MARKETS-Latam stocks up as technical barriers fall

* Regional indexes track quarterly drops

* Indexes could rise in Q2 if foreign inflows return

* Brazil Bovespa up 0.7 pct, Mexico IPC up 0.55 pct

By Luciana Lopez and Michael O’Boyle

SAO PAULO/MEXICO CITY, March 31 (Reuters) – Latin American
stocks rose early Thursday after breaking through technical
barriers, suggesting equities could begin the second quarter
with gains after disappointing so far this year.

The MSCI Latin American stocks index (.MILA00000PUS: Quote, Profile, Research) rose
1.13 percent. The gauge was headed for a flat performance for
the quarter, which was marked by volatility and uncertainty in
global financial markets.

However a recent rebound has renewed some hope that strong
economies in Latin America could lure foreign investors back in
coming months, pushing equities higher.

“We believe that for the second half of the year — with
some of this perhaps positioning already in the second quarter
— foreign inflows could come back,” said Julio Martins, a fund
manager with Adinvest in Rio de Janeiro.

Investors have shifted to developed economies this year as
recoveries in those nations gain steam. Added uncertainty
abroad, from a euro zone debt crisis to violence in oil-rich
regions to natural and nuclear disasters in Japan, only sped
the race to perceived safe havens.

Recent gains in exchange traded funds could signal that
investors are back to looking at emerging markets, wrote David
Russell, an analyst at stocks and options website
optionMonster.com in Chicago, in comments dated Wednesday.

Brazil’s benchmark Bovespa stock index (.BVSP: Quote, Profile, Research) rose 0.7
percent, breaking through resistance just above 68,000 points
to notch a two-month high.

“If we hold onto this breakthrough, the market could
advance even more,” Martins said.

The index was down around 1.2 percent for the quarter,
adding to a slight loss in the last quarter of 2010.

Preferred shares of mining giant Vale (VALE5.SA: Quote, Profile, Research) added 0.42
percent. The stock has been volatile recently on speculation
about back royalties the government is demanding and the fate
of Chief Executive Roger Agnelli.

Mexico’s IPC index (.MXX: Quote, Profile, Research) rose 0.55 percent on Thursday
after closing above technical resistance in the last session.

The index has broken out of a descending channel on its
chart, suggesting the IPC may be stabilizing after a steady
downtrend since January that has cost the gauge 3 percent this
quarter.

Among stocks rising in Mexico City were shares of America
Movil (AMXL.MX: Quote, Profile, Research), Latin America’s largest cell phone provider,
up 0.55 percent. The company said it expects dramatic growth in
data usage across the region. [ID:nN30159393]

Chile’s IPSA index (.IPSA: Quote, Profile, Research) rose 0.38 percent, but still
tracked its first quarterly loss since the end of 2008, heading
for a more than 6 percent slump so far this year.

The IPSA largely disconnected from markets abroad early in
the year, when the central bank announced a $12 billion
intervention in foreign exchange markets.

The index pushed past resistance near 4,600 points. If
those gains hold, the IPSA could see more upward momentum.
(Additional reporting by Silvio Cascione in Sao Paulo and
Doris Frankel in Chicago; Editing by Andrew Hay)

EMERGING MARKETS-Latam stocks up as technical barriers fall