EMERGING MARKETS-Vale, Cemex gain as Latam stocks rise

* Bovespa up 0.77 pct, Mexico’s IPC gains 1.24 pct

* Cemex gains on rise in U.S. new home construction

* Chile’s retail, bank sectors support IPSA
(Adds commentary, updates prices to close)

By Caroline Stauffer and Guillermo Parra Bernal

MEXICO CITY/SAO PAULO, Oct 20 (BestGrowthStock) – Latin American
stocks rose on Wednesday with gains in Brazilian miner Vale and
Mexico’s Cemex supported by strong U.S. earnings reports and
rebounding raw material prices.

U.S. markets focused on strong corporate earnings while a
sagging dollar brought commodities prices higher. Equities and
the greenback have had an inverse relationship lately and a
weaker dollar lifts companies tied to resources.

The MSCI Latin American stocks index (.MILA00000PUS: ) added
1.51 percent, following its biggest one-day percentage drop
since late June on Tuesday.

“Yesterday’s correction was seen as a minor adjustment and,
with U.S. equities performing well, investors had no other
option than flocking into Brazil again,” said Helena Biasotto,
who manages about 200 million reais in equities for Banrisul in
Porto Alegre, Brazil.

The blue-chip Bovespa index (.BVSP: ) added 0.77 percent to
70,404 led by mining giant Vale’s 2.54 percent gain.

Vale (VALE5.SA: ), the top-weighted stock in the MSCI Latin
American stocks index, will likely “surprise investors” with
strong third-quarter results next week, Itau Securities analyst
Marcos Assumpcao said in a note.

He estimated Vale’s EBITDA could reach a record $8 billion
in the third quarter due to higher iron ore prices and improved
volumes on nickel and copper.

Oil start-up OGX (OGXP3.SA: ) surged 2.63 percent after oil
prices rose in international markets. The company, controlled
by Brazil’s richest man Eike Batista, last week found oil in
shallow waters in Brazil’s Atlantic Ocean coast. Traders expect
more discoveries to be announced soon.

Brazil’s central bank is expected to hold interest rates
steady on Wednesday after markets close. [ID:nN20191643]

Stable interest rates should entice investment and
consumption in an economy that could expand this year at the
fastest pace in a quarter century, analysts said.

In Mexico, the benchmark IPC index (.MXX: ) added 1.24
percent to close at 34,880 with top-weighted American Movil
(AMXL.MX: ), Latin America’s largest wireless operator, gaining
1.58 percent.

Mexico sends roughly 80 percent of its exports to the
United States and is closely tied to U.S. markets.

“(U.S.) earnings reports have been surprisingly good,” said
Gerardo Copca, a strategist at Mexico City consultancy
MetAnalisis. “What’s driving right now is the U.S. market.”

Cemex (CMXCPO.MX: ), the world’s No. 3 cement company, gained
3.51 percent after sinking to its lowest levels since April in
the previous session.

“Cemex was previously the worst performer in the IPC,” said
Jaime Aguilera, an equity strategist at HSBC in Mexico City.
“The reassessment is explained by an improved perception in the
U.S. and signs of stabilization in the residential housing
market.”

Data on Tuesday showed residential construction in the
United States rose to a five-month high. [ID:nN19115893]

Shares in Banorte (GFNORTEO.MX: ) added 0.76 percent as the
market waited to find out how good a deal Mexico’s third
largest bank may fetch following its bid to buy the much
smaller financial group IXE. [ID:nN19159822]

Chile’s blue-chip IPSA index (.IPSA: ) edged up 0.04 percent,
supported by bank and retail sectors.

“Flows from abroad have been entering (Chile) little by
little meaning bank and retail, their preferred sectors, are
rising,” said Gianmarco Pruzzo, a trader at Corpbanca in
Santiago.

Banco Santander de Chile (STG.SN: ) added 1.2 percent while
top retailer Falabella (FAL.SN: ) gained 0.27 percent.
(Additional reporting by Fabian Andres Cambero in Santiago)

EMERGING MARKETS-Vale, Cemex gain as Latam stocks rise