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Latin American stocks settle on new US bank plan

Latin American stocks settle on new US bank plan

Brazilian and Mexican stocks traded flatter than they have in days on Tuesday, as investors took time to review a new U.S. bank rescue plan.
Sao Paulo's Ibovespa stock index rose 0.7 percent to 41,113 the day after its biggest one-day gain in a decade. Mexico's benchmark IPC index fell 0.1 percent to 22,085 after a surging 11 percent on Monday, while Chile's IPSA index rose 3.6 percent to 2,449.
Latin American stock indices are leveling off after days of record losses and steep gains on Monday, closely tracking movements seen on the world's biggest markets.
"They are following closely what is going on in the U.S.," but could be hurt by continued low prices for commodity exports, said Rafael Amiel, regional managing director for Latin America at Global Insight, a financial consultancy outside Philadelphia.
Latin America remains highly dependent on oil and gas, mining and agricultural commodities that are experiencing less demand as the global economy slows.
In New York, the Dow Jones Industrial Average lost 1.9 percent as investors examined a U.S. government plan to spend US$250 billion to buy stock in private banks.
President Bush said Tuesday the government will use a portion of its US$700 billion financial bailout to inject capital into the nation's major banks, which have been hurt by souring mortgage investments. The move follows a similar one announced Monday by European governments to invest about US$2 trillion in their own troubled banks.
Argentina's MERVAL stock index meanwhile climbed 9.1 percent to 1,327, while Colombia's IGBC index was up 9.2 percent at 8,192.5. Both were closed Monday for a national holiday, and made up for lost time Tuesday, reacting to European and U.S. bailout plans that brought world markets steep gains.
Brazil's currency _ the real _ was sitting at 2 to the dollar after closing at 2.1 on Monday. The real is expected to gain further as the central bank sells more dollars.


Updated : 2021-10-24 10:24 GMT+08:00