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Oil bid buoys many bolsas
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April 30, 1999: 4:54 p.m. ET
Argentina soars 9.6%; Brazil, Venezuela, others gain; Mexico, Toronto turn red
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NEW YORK (CNNfn) - Stock trading in Latin America got off to a robust start Friday, aided in part by news Spain's Repsol made a generous cash offer for Argentina's largest oil firm YPF and a bullish performance on Wall Street. In the afternoon, however, market enthusiasts had backed off somewhat once the Dow turned down.
Nevertheless, most of the Latin American markets managed to keep some of their gains to end the day in the black, and none more so than Argentina, where the Merval Index finished trade up a whopping 9.6 percent.
Brazilian shares surged 3 percent in morning trade, led by blue-chip oil company Petrobras amid optimism over Latin America's oil sector, traders said.
By late trade, Sao Paulo's key Bovespa index had cooled somewhat, but was still up 263 points, or 2.37 percent, at 11,348.
The Bovespa was also bolstered by gains in heavily weighted shares on growing investor confidence that Brazil will overcome a forex market scandal and continue to move away from a currency crisis that hit in mid-January.
"The market is heading up, it's more optimistic," a trader at a local brokerage said.
Mexican stocks went into a tailspin after a bull run earlier on Friday as players fled into U.S. Treasuries on renewed fears of higher interest rates north of the border, traders said.
After rising well over 1 percent in morning trade, the IPC index shadowed the Dow's decline in the afternoon, shedding 102.86 points, or 1.86 percent, to close at 5,414.45.
The morning rise was fueled in part by strong international investment following good company earnings reports, traders said.
Earlier in the day, when the Mexican market was heading up, one trader said, "The market was helped by the U.S. GDP figure showing that economy is growing and because of strong foreign capital inflow."
The U.S. Commerce Department reported on Friday that Gross Domestic Product rose 4.5 percent in the first quarter, above economists' expectations for a 3.3 percent rise.
Venezuelan investors sent stocks on the IBC index up 51.38 points, or 0.94 percent, to close at 5,514.76, putting aside temporarily their concern over the imposition of a financial transactions tax on securities trading, due to go into effect in mid-May.
Traders responded negatively to the tax news on Thursday, sending stocks down 1.6 percent.
"It is going to make the local market inoperative and erect a strong barrier to the entry of foreign capital," said Gonzalo Alonso of Activalores.
He said the new law would hurt the already-weakened local brokerage industry, including fixed-income trading, which is also subject to the tax.
In Argentina, the bolsa outdid all its neighbors, with stocks surging more than 11 percent in early electronic trade on Friday, after news that Spain's Repsol had launched a $13.4 billion cash offer for Argentine oil company YPF.
By day's end, the Merval Index closed up 49.33 points, or 9.59 percent, at 563.670.
"The Repsol news is generating euphoria in the market, but apart from the surge in prices one should keep in mind what the offer represents," said Norman Trabucco, a trader at the Zarracan brokerage.
"The fact that a foreign company is coming to invest $13.4 billion in Argentina is important and represents a vote of confidence in the face of many doubting analysts," he said.
Shares in YPF closed up 17.2 percent at $41.85.
Elsewhere in the region, stocks in Peru rose 0.63 percent to 1,644.29, and in Chile they were trading up 0.71 percent at 4,454.18 by late afternoon. Equities in Colombia bucked the positive trend, easing somewhat after a string of recent strong gains. The IBB index fell 0.53 percent to close at 1,151.21.
Toronto gets mired in red
Stocks in Toronto could not rouse themselves to move out of negative territory Friday, except briefly and barely in early morning trade.
The Toronto Stock Exchange's 300 Composite Index fell 78.63 points, or 1.11 percent, to end the day at 7,014.70.
"It's the pause that refreshes. We had a robust day on the cyclicals and they've been strong in the last four to six weeks. And we're seeing some month-end portfolio adjustments," CentrePost Mutual Funds President Rick Hutcheon said earlier in the afternoon.
All of the exchange's 14 subindexes posted losses. The day's big decliners included conglomerates, which fell 2.98 percent; utilities, which shed 2.28 percent; and the heavily weighted financial services sector, which dropped 1.22 percent. 
-- from staff and wire reports
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