By Laura Mandaro
A rally in telecom stocks lifted Brazilian shares Thursday, while speculation the country could tweak its strategy of tamping foreign inflows supported the real.
Brazil's Bovespa index gained 903 points, or 1.4%, to 64,815.72, boosted by gains in telecom carriers Vivo Participacoes (VIV) and TIM Participacoes (TSU). Brasil Telecom Participacoes shares also gained in Sao Paulo.
Vivo shares rose 5.2% after the cell-phone operator said its profit in the third quarter more than doubled, helped by lower operating costs and slightly higher services revenue.
Petrobras (PBR) shares gained 2% after the state-controlled oil company said it had bought Chevron Chile S.A.C., which produces and sells the Texaco brand of lubricants in Chile.
Brazil's real currency edged up against the U.S. dollar. One U.S. dollar bought 1.723 reals, compared with Wednesday's close at 1.728 reals.
Giving the currency a lift, said Brown Brothers Harriman currency strategist Marc Chandler, were local press reports saying Brazilian officials are evaluating other measures to slow capital inflows -- including the government selling a Brazil-denominated bond issue to foreign investors.
Last month, Brazil's government said it was imposing a 2% on foreign purchases of Brazilian bonds and stocks in a move to slow a wave of investments that have driven up stock prices but also made its currency more expensive, a risk to its exports.
The currency has gained about 35% this year. It tumbled when the government announced its decision to impose capital controls on Oct. 20 but has since stabilized to roughly the same levels before the announcement.
"Perhaps most important for foreign investors though is the talk that officials may change the rules and allow investors to deposit guarantees overseas," Chandler wrote.
Mexico's IPC index gained 1% to 29,735.34, led by modest gains manufacturing and industrial firms' shares.
Chile's IPSA edged up just 5 points, or 0.1%, to 3,351.61 after the country's central bank said the Imacec index, which tracks 90% of gross domestic product, slumped 1.1% in September. Economists polled by Dow Jones Newswires expected a decline of 0.5%.
Argentina's Merval slipped 0.9%.
On Wall Street, stocks rallied broadly on a drop in U.S. weekly jobless claims and optimistic comments about the economy from Cisco Systems' (CSCO) chief executive. The Dow Jones Industrial Average (DJI) rose 203 points, or 2.1%, to close above 10,000.
Oil prices fell 1% to $79.62 a barrel. Copper prices also faltered.