By Carla Mozee Brazilian stocks closed higher Tuesday, with most banking issues up following a report that showed that lending grew last month. Separately, a new report indicated that inflation in Latin America's largest economy remained at benign levels this month. Brazil's Bovespa equity index rose 0.6% to end at 68,296.04, the fourth session of gains as manufacturing and transportation contributed to the advance. Leading price performers were shares of brewer AmBev (ABV) and airline TAM (TAM), each up more than 3% and online retailer B2W, up 2.8%. Regional banking stocks rose 1.3%, with Itau Unibanco (ITUB) higher by 1.9% and Banco Bradesco (BBD) up 0.7% after Brazil's central bank said total available credit rose 1.5% in November to 1.389 trillion reals ($801.2 billion) from October, the fastest rate of growth in three months. Average default rates, meanwhile, were steady at 5.8%. Default rates for individuals fell 8.1% from 8.2% in the previous month's survey. The default rate fell 3.9% from 4% for businesses. At the same times, average interest rates fell, to 34.6% from 35.6% in October, following the direction of the key Selic rate which monetary policymakers have cut this year to a historic low of 8.75%. But shares of state-run Banco do Brasil (BDORY) on Tuesday lagged its privately-operated rivals, moving down 0.2%. Among Brazilian market heavyweights, shares of miner Vale (RIO) ticked up fractionally and oil firm Petrobras (PBR) rose 0.14%. Retailing stocks also closed higher, drawing support from a report from the private Getulio Vargas Foundation that its IGP-M price index, which tracks wholesale, consumer and construction-related prices, fell 1.72% in December from the year-ago period. Analysts at UBS Pactual had estimated a 1.62% year-over-year decline. The index also showed that prices fell 0.26% from November. With inflation largely at bay, market strategists have said that the central bank is in a position to keep its benchmark Selic rate unchanged for the next few months. Earlier this week, a weekly survey of economists conducted by the central bank showed that they expect, on average, the government's key inflation index to end at 4.28% this year. The central bank's inflation target is 4.5% . The estimate for the inflation index in 2010 held steady at 4.5%. In Mexico, the IPC index ended up 16 points at 32,626.29, logging a fresh yearly high and its fifth winning session in row, the longest win streak since early November. Chilean and Argentine stocks also finished at their best levels this year. In Santiago, the IPSA index rose 0.6% to 3,563.18. The Merval rose 1.5% to 2,314.88.