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Latin America stocks rise as pause offers deals

Latin America stocks rise as pause offers deals

Latin American stocks rose on Monday, rebounding slightly amid a monthlong pause that analysts welcomed as an opportunity for investment.
Brazil's Ibovespa index climbed 1.3 percent to 52,138, its highest close since June 12 after plunging early last week. Shares of miner Vale SA gained 0.9 percent while state-run oil company Petroleo Brasileiro SA soared 2.4 percent on a 3.4 percent surge in world crude prices. The two companies make up nearly a third of the index.
Brazil's currency weakened 1.4 percent to about 1.96 reals to the U.S. dollar.
Mexico's benchmark IPC index meanwhile rose less than 0.1 percent to 24,474, its highest close since June 15. Shares in billionaire Carlos Slim's telephone company Telefonos de Mexico SAB rose 3.4 percent while and low-cost homebuilder Desarrolladora Homex SAB gained 2.3 percent. The two companies, among Monday's biggest gainers, comprise about 3.4 percent of the index.
The peso strengthened about 0.2 percent to 13.19 to the dollar. The battered currency has gained 16 percent since markets bottomed with the economic crisis in early March, but it is still 23 percent weaker than at this time last year.
Elsewhere in Latin America, Argentina's Merval rose 0.6 percent to 1,589. Markets were closed for national holidays in Chile, Colombia and Peru.
Latin American stocks have been pounded by the world economic crisis, which slashed demand for the commodity exports on which many of the region's biggest companies rely. Yet regional markets have bested gains in the U.S. since March as investors bet the worst of the crisis was over, reviving appetites for risk and raw materials.
Mexico's IPC and Brazil's Ibovespa have both gained 46 percent from their lows on March 3, while the Dow is up 32 percent since its low on March 9.
Analysts at Citigroup Global Markets urged investors not to worry about a retreat in local equity markets, which it expects to shave about 15 percent off the MSCI Latin America Index, a key benchmark of stocks in six of the region's biggest economies.
"We view this as a welcome and overdue 'pause that refreshes' that should be used by investors for positioning for the next leg of this new bull market," Citi said in a research note.
It said it expects stocks to rebound within two months, once investors are more certain that the U.S. and Brazilian economies are recovering and that company earnings are on the rebound.
U.S. stocks rose on Monday, with the Dow Jones Industrial Average gaining 1.1 percent to 8,529 as rising energy prices boosted hopes that a sustained economic recovery is under way.