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Argentine index rallies
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October 30, 2001: 6:38 p.m. ET
Brazil, Mexico markets continue to slide fearing Argentine debt default.
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NEW YORK (CNNmoney) - Argentine markets rallied Tuesday despite fears that the country may default on its $132 billion debt, but other Latin American markets continued to fall awaiting news from the country.
Argentina's main market index closed up 1.8 percent, while Brazil's ended 3.1 percent weaker and Mexico's fell 1.2 percent. Toronto's TSE was also down 1 percent.
Argentine markets rally; default fears remain
Argentine markets rebounded slightly Tuesday from recent heavy losses, but investors remained fearful the troubled economy could soon lead the government to default on its $132 billion debt.
Investors are worried that as Argentina's recession enters its fourth year, declining tax revenue could leave the government without cash to service its hefty debt.
The leading MerVal stocks index closed up 1.8 percent, gaining 4.04 points to 223.58, recovering from earlier losses of about 4 percent. Turnover was low at $12.7 million. Overall, 17 shares declined, 15 advanced, and six traded unchanged.
Tuesday's gains followed a market rout Monday that saw the MerVal lose 8.7 percent on fears default was imminent. Argentine stocks are down about 46 percent this year as investors dumped shares in light of the bleak economic outlook.
On the Buenos Aires Stock Exchange, leading share Grupo Financiero Galicia gained 2.8 percent to 56 cents. Grupo Galicia's main unit, Banco Galicia, is a large holder of Argentine government debt.
Energy group Perez Companc gained 4 percent to $1.04.
Brazil eyes Argentina, Wall St. drop
Brazilian stocks sank Tuesday as traders translated a heady mix of worries about an Argentine default, attacks on U.S. soil, and U.S. economic weakness into sell signals.
But on the positive side, the country's beleaguered currency, the real, held up on hopes a privatization would attract an inflow of dollars and news Poland had agreed to repay Brazil $2.4 billion of debt.
Brazil's Bovespa stock index ended 3.1 percent weaker at 11,023.9 points, leaving it 27.8 percent lower on the year, in broad-based selling.
Bovespa losers outweighed gainers by 51 to 3. Telemar, Brazil's biggest phone company and market heavyweight, showed the way with a 3.9 percent drop to 26.91 reals.
Elsewhere, the biggest Brazilian mobile phone operator, Telesp Celular, was the second-most traded share. It lost 5.9 percent to 5.43 reals.
The real currency ended at 2.722 per U.S. dollar, one tick firmer than Monday's close of 2.723 per U.S. dollar, after orbiting the previous ending level.
Hopes Belgian company Tractebel would win the privatization auction for southern power utility Copel and bring dollars to the country helped cancel out the Argentine jitters.
Mexico markets share Argentina worries
Mexican stocks finished lower Tuesday led by softer blue-chip telecom and media issues as concerns over the ailing U.S. economy overshadowed the threat of a full-blown default in crisis-plagued Argentina.
Mexico's IPC index of 35 leading stocks fell 1.2 percent to close at 5,529.18 points. The index is about 20 percent below its 2001 high, posted on July 4.
In local market action, telecom and media issues led percentage losers with shares of TV Azteca shedding 2.5 percent to end at 2.75 pesos per share despite a rating upgrade by ABN AMRO earlier Tuesday to buy from hold.
Also Tuesday ABN AMRO said it revised upward its earnings estimates and raised its price target for Mexican telecom provider Telefonos de Mexico citing healthy third quarter results.
Shares of bellwether Telmex, which account for about 16 percent of the IPC, fell 0.83 percent to close at 15.61 pesos per share after shedding nearly 3 percent earlier in the trading session.
In the currency market, the benchmark 48-hour peso finished almost unchanged at 9.2575 per U.S. dollar after weakening to 9.2850 per dollar on economic jitters.
Toronto stocks fall on broad-based worries
Toronto stocks fell Tuesday, taking broad losses as investors reeled from a witches' brew of negative corporate news, weak U.S. economic numbers, Argentine debt worries and renewed warnings of attacks on U.S. soil.
The Toronto Stock Exchange 300 composite index closed down 70.93 points, or 1 percent, at 6,825.41, as tech, oil, and metals stocks pulled the market to its second straight session of losses.
The tech-heavy industrial products sector shed 2.9 percent during the session, as aerospace and rail manufacturer Bombardier Inc. dropped 11 percent, or C$1.26, to C$10.14, hitting a new 52-week low amid jitters in the aerospace sector and short-selling pressure on the stock.
Fuel cell developer Ballard Power fell C$2.49, or 5.8 percent, to C$40.55, while Celestica Inc. dropped C$2.50, or 4.6 percent, to C$52.00, as both stocks fell for the third straight session.
The blue chip S&P/TSE 60 index fell 4.27, or 1 percent, to 393.88. 
-- from staff and wire reports
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