Latin American stocks rose on Friday as gains in US manufacturing outweighed worries of a slowdown in Chinese factories, with equities following US stocks to their biggest weekly gain in nearly a year. The MSCI Latin American index rose 1.47 percent, to close at its highest since May. The index rose 5.9 percent this week - its best such performance since late July 2010.
An easing of fears over Greece's sovereign debt crisis and positive US data helped the week's gains, as faster growth in manufacturing ameliorated concerns about slower factory sector growth in China. The US numbers "at least dispel the risk of the US going into a double-dip recession," said Alberto Bernal, head of research at Bulltick Capital Markets in Miami. He also pointed to Thursday's stronger-than-expected Chicago-area purchasing managers data.
Bernal said Europe's moves to avoid a debt default in Greece also boosted Latin American markets in the week. Mexico's IPC rose 0.66 percent to close the week up 4.1 percent, its biggest one-week gain since December 2009. The IPC's 14-day simple moving average crossed above the 50-day SMA, a potential sign of further upward momentum to come.
Bernal said the IPC could be on the verge of a "significant rally" in line with US stocks, which had their best week in two years. Coca-Cola Femsa, the world's largest Coke bottler, added 2.75 percent, and retailers Wal-Mart de Mexico and Elektra gained 0.72 percent and 3.81 percent, respectively.
Brazil's Bovespa added 1.59 percent to close the week up 3.8 percent, its best one-week gain since July last year, led by shares in the index's heavyweights including exchange operator BM&FBovespa, which added 5.23 percent. Mining giant Vale rose after the company said it plans to repurchase up to $3 billion of its shares. The company's preferred shares jumped 4.46 percent and the common stock added 4.45 percent.
The gains came as Brazil's real closed at a 12-year high on Friday. "The battery of data from the United States perked up international markets," said Adriano Moreno, a strategist with Futura Investimentos. But he cautioned the day's gains could be short-lived.
"Things are still too cloudy abroad for us to buy into the idea that this is a real trend," he said. In July, investors will look to corporate earnings. "If we have a series of good numbers, then we could see a reversal" of recent drops. Shares of retailer Grupo Pao de Acucar gained 1.16 percent, capping a roller coaster week for the stock on a contentious investor buyout plan that could see it merge with French rival Carrefour. Shares of Brazilian watchmaker Technos jumped 6.18 percent in their debut in Sao Paulo trading. The Rio de Janeiro-based company and shareholders raised a total 460 million reais ($291 million) in an initial public offering.
Chile's IPSA index edged up 0.06 percent on Friday and posted its strongest week since April adding 2.2 percent. Retailers dropped, with Falabella down 0.55 percent and Cencosud losing 1.05 percent. La Polar shed 16.03 percent, as the retailer continued to deal with the fallout from a credit scandal. "The drop is due to the fact that the firm has to pay out funds for the renegotiations with clients," said Claudio Gonzalez, head of research at Santiago's Tanner brokerage.