SAO PAULO: Latin American stocks edged higher early on Monday on hopes Greece's parliament would approve austerity measures to help avoid a sovereign debt default, although a drop in commodities left some cautious.
The MSCI Latin American index added 0.35 percent after two straight sessions of losses.
Brazil's benchmark Bovespa stock index rose 0.48 percent in choppy trading, also after two days of losses.
"You can see this (rise) as a recovery from Friday, though things in Europe remain complicated," said Andre Perfeito, chief economist with Gradual Investimentos in Sao Paulo.
But he warned that, with commodities down on Monday investors could be wary of Brazilian stocks, many of which are tied to the trade in raw materials.
Investors will watch Greece keenly this week, where parliament is set to debate a deeply unpopular austerity plan that has sparked some citizen protests.
Danske Bank said the government's small majority appeared intact but it warned clients to be prepared for a week of rumors about cracks appearing in its unity.
A default in Greece could reverberate around the world, dragging down growth and reducing appetite for Latin American commodity exports. A deal to avoid that fate would boost global risk appetite.
Among shares rising in Brazil were heavyweight preferred and common stock in state-controlled oil company Petrobras. The preferred shares advanced 1.01 percent as the common stock rose 1.23 percent.
But mining giant Vale, the world's biggest producer of iron ore, limited gains. Preferred shares lost 0.5 percent and common shares 0.8 percent.
"Our call is that commodities and mining stocks will see another major leg down over the summer," UBS analyst Julien Garran wrote to clients. Key drivers will include tight credit in emerging markets and flows out of those markets and into the United States.
Mexico's IPC index climbed 0.52 percent, breaking above resistance around 35,400 points.
America Movil, one of the world's biggest telecommunications companies and a major weight in the index, added 0.73 percent.
Chilean markets were closed for a holiday.
Copyright Reuters, 2011
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