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Venezuela, Mexico soar
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April 15, 1999: 5:05 p.m. ET
Caracas shares rise 9% as political fears ease; Mexican stocks jump 3.7%
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NEW YORK (CNNfn) - The standout market performances in the Americas Thursday belonged to the bolsas in Venezuela and Mexico, where equities surged 9 percent and 3.7 percent, respectively.
Venezuelan stocks skyrocketed on heavy demand for the market's two most liquid stocks as investors bet the government would reach a compromise with Congress on economic reforms, brokers said.
The benchmark IBC index closed up 377.78 points, or 8.99 percent, at 4,579.92. Earlier in the day shares in market bellwethers Electricidad de Caracas and telephone company CANTV were up more than 9 percent. International investor interest in EDC was particularly strong, players said.
Despite the gains, one local broker cautioned, "It's still a very unstable market. All the demand is concentrated in two stocks because they are by far the most liquid."
The bolsa has been hit in recent days by a tense political standoff between President Hugo Chavez and the opposition-dominated Congress over his request for wide-ranging powers to push through legislation by decree. The president had been threatening to declare a state of emergency, but on Wednesday night he said he no longer saw the need.
"The day before yesterday I thought I was going to have to go to the extreme of decreeing a national emergency, but today I don't think I will have to," Chavez said in the western city Merida during a news conference, extracts of which were broadcast by the Globovision network Thursday.
Government officials, including Finance Minister Maritza Izaguirre and Planning Minister Jorge Giordani, were meeting with legislators Thursday to hammer out a version of the special powers bill that is acceptable to both sides.
Despite the thawing of tensions over the bill, which the government says is needed to push through reforms aimed at slashing a $9 billion budget shortfall, Chavez said the decree to declare an emergency is drafted and ready to be signed if needed.
In Mexico, stocks on the IBC index ended at a record high, up 193.27 points, or 3.65 percent, at 5490.62, after earlier hitting an intraday record, powering through the 5,500-point barrier for the first time. Equities got a boost as international buyers came into the market and hopes for a rebound in commodities prices whetted investor appetite for conglomerates and mining companies, dealers said.
"The market sees commodities bottoming out, which means prices could rebound and they're buying on that expectation," a trader said.
Inverlat brokerage mining analyst Rodrigo Marin added that Mexican mining stocks had lagged behind recent gains on the bolsa and investors also were hoping for a revival in demand for metals in Asia.
Stocks retreated slightly from their highs after the Finance Ministry reported that Mexico's industrial production in February rose 2.2 percent compared to the same month a year ago, less than the 2.46 percent increase economists expected.
In Brazil, stocks on the Bovespa index were down 66 points, or 0.59 percent, at 11,240 in late afternoon trade.
Despite the decline, there was reason for optimism based on the central bank's cut in the country's benchmark overnight interest rate Selic after the market's close Wednesday.
The rate cut, to an annual 34 percent from a previous 39.5 percent, was the bank's third major cut in three weeks.
"The cut in interest rates yesterday also underlines optimism that foreign investors are returning to Brazil, and this should further help the bourse," said one local trader.
In currency news, Brazil's real firmed 0.6 percent to end at 1.665 per U.S. dollar amid capital inflows, traders said.
On other Latin bolsas, stocks on the Merval index in Argentina enjoyed a surge of their own, closing up 3.04 percent at 458.04. In Chile, equities had risen 0.39 percent to 4,453.85 in late afternoon trade, while those in Peru finished the day up 1.13 percent at 1,521.63. Shares on the IBB index in Colombia bucked the region's upward trend, falling 1.02 percent to 990.23.
Toronto finds its resources
Resource stocks provided a leg up for the Toronto Stock Exchange's Composite 300 index, which closed higher by 41.60 points, or 0.60 percent, at 6,990.50.
All but four of the TSE's 14 subindexes posted gains, led by a 6.52 percent surge in paper and forest stocks, a 5.30 percent jump in metals and minerals, and a 3.99 percent rise in gold and precious metals.
Rolie Bradley, a trader at Maison Placements Canada, said the resource renaissance was the result of renewed hope that Asia will recover soon and that commodity prices have bottomed out.
Strength in resource stocks was muted somewhat by the exchange's recent darlings, communications and media stocks, which fell 2.42 percent, and consumer products, which lost 1.51 percent. 
-- from staff and wire reports
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