By Laura Mandaro
Brazilian stocks closed higher Thursday, breaking with declines in Mexico and Chile, as the country's jobless rate slid, boosting airline and bank stocks.
The Bovespa rose 649 points, or 1%, to 66,134, lifted by a 5.1% gain in local shares of packaging maker Klabin and a 4.5% gain in shares of TAM (TAM).
Competitor Gol (GOL) shares rose 3.9%.
The rise in Brazilian airline stocks paralleled gains in the U.S., where the NYSE Arca Airline index (XAL) added 0.5% on better-than-expected results from Delta Air Lines, Inc. (DAL) and US Airways Inc. (LCC), and a drop in oil prices.
Aircraft manufacturer Embraer Empresa Brasileira de Aero (ERJ) and Banco Bradesco (BBD) also led the index higher, which is recovering from a steep sell-off on Tuesday after the government imposed a tax on foreign purchases of securities.
Brazilian jobs data, released earlier Thursday, indicate that Latin America's largest economy continues to improve. The IBGE census bureau said unemployment rate in September was 7.7%, below the market consensus of 8%. The rate is the lowest of the year, and has returned to levels not seen since the start of the worldwide financial crisis.
The unemployment rate was 8.1% in August.
Boosting sentiment
Brazil's real, which also tumbled earlier this week on the move to rein in foreign capital flows, gained against the U.S. dollar. One U.S. dollar bought 1.725 reals, down from 1.728 late Wednesday.
Late Wednesday, Brazil's central bank decided to keep its key interest rate unchanged at 8.75%.
The Bovespa's gains contrasted with drops in Mexico and Chile.
Mexico's IPC index slid 128 points, or 0.4%, to 30,762.
RBC Capital Markets analysts said they now anticipate all ratings agencies will downgrade Mexico's credit ratings by one notch, to triple-B, within weeks, after the country's main political party approved tax increases that failed to widen the taxable base.
Chile's IPSA lost 9 points, or 0.3%, to 3,414.