Latam stocks jump but gains seen vulnerable

Latin American stocks climbed on Friday amid expectations Italy's budget measures may help stem a eurozone debt crisis, but analysts said unanswered questions meant any gains were vulnerable. The MSCI Latin American stock index jumped 3.03 percent, reversing a dip in the previous session and crossing back above the index's 14-day simple moving average.
The gain also helped the MSCI turn around a lacklustre week to advance 0.7 percent. Italy's Senate approved a new budget law on Friday, clearing the way for lower house approval of an austerity package and the formation of an emergency government to replace that of outgoing Prime Minister Silvio Berlusconi.
The country's 10-year bond yields this week shot past 7 percent, a level many observers consider unsustainable as rising interest costs on debt force cuts in public services. But with the 10-year bond yields easing on Friday, investors around the world bought higher-risk assets.
"We're following gains abroad," said Roni Lacerda, a fund manager with Mercatto Investimentos in Rio de Janeiro. "We're still very closely tied to the European crisis." But with so many questions still surrounding the eurozone's sovereign debt crisis - which has seen rescue packages crafted for Greece, Ireland and Portugal so far - analysts said markets were struggling to post consistent gains.
"Volume is just feeble, there is no real appetite to buy," said Mauricio Cervantes, a trader at brokerage Multivalores in Mexico City. "The market is trading on pure expectations, but there is no certainty that these hopes will come to pass," Cervantes said.
US-based mutual funds focused on Latin America saw their first inflows in 11 weeks in the week ending November 9, according to data from Lipper, a Thomson Reuters company, with a net $13.8 million in new investments. But analysts warned the new focus on Italy could keep investors from continuing to pour more money into Latin American stocks.
Mexico's IPC index climbed 2.57 percent on Friday bouncing back after a sharp fall earlier in the session prompted by the news of Interior Minister Francisco Blake's death in a helicopter crash. "The market was impacted for a moment with the passing of Blake, nevertheless the accords in Italy had a stronger (impact)," said Gerardo Copca, an analyst at MetAnalisis in Mexico City.
The index gained 2.36 percent for the week. Mexican copper miner and railroad operator Grupo Mexico led gains advancing 3.14 percent. Cement maker Cemex jumped 5.24 percent, helped by hopes it will be able to sell assets to pare down its heavy debt burden.
Brazil's benchmark Bovespa stock index gained 2.14 percent, breaking above its 14-day simple moving average, retracing the week's losses to dip just 0.21 percent. Weak volumes in recent sessions have highlighted a lack of investor conviction.
Preferred shares of state-controlled oil company Petrobras added 2.09 percent as the company's common stock moved up 1.49 percent. Mining company Vale, the world's largest producer of iron ore, added 1.32 percent. Chile's blue chip IPSA index put on 1.15 percent for a 1.60 percent weekly advance. Banco Santander Chile climbed 2.48 percent.