Copper rally and rate cuts drive analyst bets on Peru, Brazil

By Kylie Madry

SANTIAGO, Feb 19 (Reuters) - Rising metals prices driven by artificial intelligence demand and a global industrial recovery prompted an upgrade of Peruvian equities to "overweight" by Oxford Economics analysts on Thursday.

The firm maintained its "overweight" rating for Brazil on expected interest rate cuts.

• Peru is best placed to capitalize on the copper cycle due to its high export exposure to the red metal, in high demand for data center buildouts, the analysts said.

• While Chile is also a copper-producing powerhouse, analysts cited downside risks from mining closures, strikes and logistical bottlenecks, maintaining a "neutral" rating.

• In Brazil, which has a more diversified economy than its regional peers, an expected interest rate cut cycle "will likely prove a powerful driver of (local) equities in the medium term," the analysts wrote.

• Oxford Economics remained "underweight" on Mexico and Colombia, citing political uncertainty surrounding Mexico's trade negotiations with the U.S. and Canada and a monetary tightening cycle in the Andean nation.