MEXICO CITY (AFX) - Latin American shares ended mixed on Tuesday, with Mexican and Chilean shares finding some buyers but markets elsewhere in the region burdened by continued worries about rising domestic and international interest rates.
After the bout of selling that wiped off 2006 gains from most Latin American stock indices earlier this month, investors remain cautious about dipping back into markets, even at deeply discounted prices, traders and analysts said.
'It's probable that this recovery will take a while,' Jorge Alberti, an analyst with Argentina's elaccionista.com consultancy.
Mexican stocks closed higher Tuesday, recovering some of the ground lost Monday. The benchmark IPC index of the 35 most-traded companies rose 1.1 percent, or 199.4 points, to 17,781.27, after shedding 2.5 percent in the previous session.
Mexico's peso recovered ended slightly stronger despite volatility ahead of the upcoming presidential elections. The peso closed 11.4715 to the dollar compared with Monday's close of 11.4790.
Recent polls show left-wing candidate Andres Manuel Lopez Obrador about even with conservative Felipe Calderon going into Mexico's July 2 presidential elections.
Brazilian shares, meanwhile, closed lower Tuesday in tepid trading. The benchmark Ibovespa stocks index ended off 0.78 percent at 33,632 points.
Many institutional investors worry the Brazilian Central Bank will halt its recent trend toward interest rate cuts. The central bank could take a more cautious stance precisely because of the international emerging markets volatility.
Rising rates in the United States and elsewhere triggered the recent sell-off in global emerging markets as investors worried about slower economic growth shifted cash into fixed-income instruments.
The Brazilian real closed slightly stronger against the U.S. dollar Tuesday as exporters sold dollars to the market, creating demand for the local currency. The real closed at 2.245 per dollar, up slightly from the Monday close of 2.249.
Argentine stocks pulled back Tuesday as the market returned from a three-day weekend, though volumes dried up on persistent investor malaise. The benchmark Merval Index dropped 1.8 percent, or 28.25 points, to 1,550.24 points. The Argentine peso ended unchanged Tuesday at 3.08 to the dollar.
Chile's benchmark stock market index posted modest gains Tuesday. The 40-share benchmark Ipsa index closed at 2,043.67 points, up 0.5 percent, but failing to recoup Monday's 1.4 percent drop.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.