Emerging markets: Brazil earnings boost Latam stocks

With the economic recovery, Brazil has come out of the crisis stronger

Latin American stocks rose on Wednesday, boosted by solid earnings in Brazil, but a downbeat reading of the U.S. economy by the Federal Reserve cut into gains and spurred losses in Mexico and Chile.In Brazil the strong rates of economic growth have spurred optimism on second-quarter earnings, which are just getting under way.

“With the economic recovery, Brazil has come out of the crisis stronger. Brazilian companies are going to start showing those results now,” said Alvaro Bandeira, director with Agora brokerage in Sao Paulo.Brazil’s Bovespa index .BVSP gained 0.2 percent, led by a 4.51 percent jump in shares of bank Bradesco after its profits beat estimates, helped by growing credit demand and reduced delinquencies.

“We believe that Bradesco, given its extensive presence, is well positioned to benefit from the growth outlook we expect for the sector as a whole in 2010,” said Laura Schuch, a bank analyst at the Ativa brokerage in Rio de Janeiro.

Shares of mining giant Vale (VALE5.SA), the world’s largest producer of iron ore, added 1.31 percent before its earnings report on Thursday where net income at the company likely soared nearly five-fold.

Wireless operator Vivo (VIVO4.SA) jumped 3.95 percent after Portugal Telecom’s board approved the sale of its stake in the Brazilian company to Telefonica (TEF.MC). Vivo also posted better-than-expected second-quarter net income.
(Reuters)