Dec. 1 (Bloomberg) -- Venezuela's main stock index soared 8.4 percent, the biggest gain in almost four years, on the expectation that Hugo Chavez will be re-elected in a peaceful vote before the market reopens after the weekend.

Venezuela's IBC index rose 3628.37 to 46,741.54. Shares of Banco Provincial SA, which announced a dividend, accounted for about two-thirds of the gain. Elsewhere in Latin America, Brazil's Bovespa index fell 604.77, or 1.4 percent, to 41,327.07, for a weekly loss of 1 percent, the first decline in five weeks.

The gain in Venezuela was the biggest since Jan 27, 2003, when the market reopened after an eight-week national strike. Polls show Chavez will defeat his main challenger, Manuel Rosales. Investors were trying to buy stocks beforehand to take advantage of a possible rally after the Dec. 3 vote, said Rufino Gonzalez-Miranda, director of Fidevalores, a Caracas brokerage. Trading volume was $10.2 million, compared with the three-month average through yesterday of $3.7 million.

``People are betting that Chavez is going to win and we're going to continue in a peaceful, non-conflict situation,'' Miranda said. ``Even if we have a situation in which our president goes wild and says he wants to do a lot of crazy things, it's just political speech.''

Chavez's has maintained his popularity as record oil revenue helped him fund social spending and spurred economic growth of more than 10 percent a year. The index has more than doubled this year, the second best performance of 81 primary indexes tracked by Bloomberg.

Chavez is an ally of Cuban leader Fidel Castro and one of U.S. President George Bush's harshest critics, raising concern that his re-election may encourage government policies that would hurt equity markets in other Latin American countries. Such concerns are unfounded because Chavez has limited political influence in the larger Latin markets, said William Landers, who manages $4 billion of LatinAmerican assets for Blackrock Inc.

``It doesn't change investment attractiveness in the region,'' he said in a telephone interview yesterday from Princeton, New Jersey. ``As an equity investor, it does not deeply concern me.''

In Brazil, stocks fell as a report that U.S. manufacturing unexpectedly shrank last month spurred concern that slower growth may hurt corporate profits and stocks worldwide. U.S. manufacturing contracted last month for the first time in more than three years, the Institute for Supply Management reported.

``The numbers were weaker, so it's normal to sell equities, but I think there still are lots of bargains in Brazil,'' said Bruno Garcia, who helps manage 2.7 billion reais in assets at ARX Capital Management in Rio de Janeiro. ``I still believe the index will continue to rise the rest of the year.''

Cia. Vale do Rio Doce, the world's largest miner of iron-ore, a principle ingredient in steel, fell. Construction spending dropped by the most in five years in October, the Commerce Department said in Washington today.

Elsewhere in the region, the benchmark stock index in Argentina fell, while indexes with Peru, Colombia rose and Chile's IPSA index was little changed. Mexico's Bolsa index was closed for a presidential inauguration. The Morgan Stanley Capital International index of Latin American shares fell 0.9 percent to 2780.48 and was little changed for the week.

The following are the most-active stocks in Latin American markets today. In Brazil, the preferred share is usually a company's most-traded class of stock.

Brazil

Centrais Eletricas Brasileiras SA (ELET3 BS), the common shares of Brazil's state-controlled electricity holding company, fell 1.3 real, or 2.5 percent, to 50.10 reais. Socopa Corretora analyst Daniel Doll Lemos yesterday recommended ``caution'' in buying the stock until the details of a share sale are released Dec. 20. Eletrobras's president said earlier this week that the state will sell shares to raise money to invest in the company, according to the analyst's report.

Petroleo Brasileiro SA (PETR4 BS), Brazil's state-controlled oil company, fell for the first day in four, dropping 53 centavos, or 1.2 percent, to 45.30 reais.

Tele Norte Leste Participacoes SA (TNLP4 BS) Brazil's largest telephone company, fell 60 centavos, or 1.9 percent, to 31.40 reais. Common shares (TNLP3 BS) rose 1.78 reais, or 2.57 percent, to 70.98 reais. Brazilian securities regulators maintained their position on criteria for voting on a capital restructuring, said Soraia Duarte, the regulator's spokeswoman, in a telephone interview from Rio de Janeiro. Preferred shareholders, including those who also hold common shares, should be able to vote in a shareholders' meeting, the regulator said in a statement released yesterday. The decision increases the chances that the justice department will revoke its preliminary ruling, which delayed the restructuring vote, Brascan analyst Felipe Cunha said in a report e-mailed today. This will buoy common shares in the short term, he said.

Venezuela

Banco Provincial (BPV VC), Venezuela's fourth-largest bank by assets, rose 570 bolivars, or 46 percent, to 1800 bolivars. Banco Provincial said it will seek shareholder approval on Jan. 11 to pay a special share dividend. The bank, a unit of Spain's Banco Bilbao Vizcaya Argentaria SA, said it will seek permission to pay shareholders four new shares for every one held.

Banco Pronvincial president Jose Antonio Colomer said on Nov. 27 that the bank plans to boost lending in 2007 as consumer spending in Venezuela booms.

To contact the reporter on this story: Alexander Ragir in New York at at aragir@bloomberg.net; Theresa Bradley in Caracas at tbradley7@bloomberg.net

Last Updated: December 1, 2006 16:57 EST