ADR Report-Foreign shares fall; Brazil ADRs drop on tax

NEW YORK Nov 19 (Reuters) - Overseas shares traded in the United States tumbled on Thursday as the U.S. dollar firmed, while U.S.-listed shares of Brazilian companies were hit by a new government tax.

Brazil announced on Wednesday a 1.5 percent tax when overseas investors convert American Depositary Receipts into local stocks, sending an index of Brazilian ADRs .BKBR down 1.8 percent.

The move was made to close a loophole after the government placed a tax on capital inflows into stocks in an effort to contain currency gains. This prompted investors to snap up ADRs and then convert them into receipts for locally issued shares, thereby avoiding being taxed. For details, see [ID:nN18128104]

"The tax itself is not that big a deal, not when the Bovespa (index) is up over 130 percent year-to-date in dollar terms," Win Thin, senior currency strategist at Brown Brothers Harriman & Co wrote.

"We think the policy inconsistencies are what the analyst and investor community is more negative about with regards to this news, not the tax itself on new ADR issuance."

Receipts with the Bank of New York Mellon index of leading Latin American ADRs .BKLA fell 1.9 percent.

Foreign shares fell along with global equities markets, while the stronger greenback curbed demand for overseas shares priced in the U.S. currency.

In equities news, Sony Corp (SNE.N) pushed back its profit margin target to March 2013 after narrowly failing to meet the goal last year, but said it aims to make its video game and TV operations profitable next year. Sony's New York-listed shares gave up 4.9 percent at $26.86. [ID:nT265644]

Dutch chip equipment maker ASML Holding NV (ASML.O) lost 5.4 percent to $30.13 after Bank of America Merrill Lynch downgraded the stock to "neutral" from "buy" as part of its semiconductor sector review. [ID:nBNG431820]

China Mobile (CHL.N) added 0.4 percent to $49.31 after it said its business has recovered to levels before the global downturn as the rebounding economy boosts international calling. [ID:nHKG248186]

The Bank of New York Mellon index of leading American Depositary Receipts (ADRs) .BKADR fell 2.2 percent. The U.S. benchmark S&P 500 index .SPX slid as the bearish comments on the semiconductor sector hit technology shares and the stronger U.S. dollar dented recent gains.

The Bank of New York Mellon index of leading Asian ADRs .BKAS lost 2.9 percent. Hong Kong shares succumbed to profit taking, while Japan's Nikkei slumped to a four-month closing low the day after Mitsubishi UFJ Financial Group (MTU.N) announced a massive fund raising.

MUFG's New York-listed shares slid 4.3 percent to $5.13.

The Bank of New York Mellon index of leading European ADRs .BKEUR was down 2 percent. In Europe, the FTSEurofirst 300 .FTEU3 index of top shares fell for a third straight session as tech shares there also fell and weak commodity prices pressured energy and mining companies. (Reporting by Leah Schnurr; Editing by Kenneth Barry)