Brazil stocks dip on investor caution, real flat

SAO PAULO Nov 24 (Reuters) - Brazilian stocks slipped in early trading on Tuesday as investors moved to protect profits from a months-long rally in the country's shares before the end of the year.

The benchmark Bovespa index .BVSP fell 0.33 percent to 66,587.26, reversing some of Monday's gains.

"A number of investors already have their minds on 2010," said Andre Perfeito, an economist at Gradual Investimentos. "The markets have risen a lot this year, and people are getting nervous" about guarding those profits until 2009 ends, he added.

The index has gained about 77 percent so far this year through Monday.

But Adriano Moreno, a strategist with Futura Investimentos, said he sees relatively little downside risk for the Bovespa index through the rest of the year, or room for significant advances, either.

A flurry of data also gave investors reason for pause.

In the United States, the government revised the third quarter gross domestic product growth to 2.8 percent from a previously estimated 3.5 percent. It was below the 2.9 percent revision the market expected. For more see [ID:nN23258482].

Domestically, Brazil's October current accounts BRCURA=ECI registered a deficit of 2.9 billion reais, larger than the 2.6 billion real deficit projected by a Reuters poll of 19 analysts. [ID:nN24290833]

Brazil's currency, the real BRBY, traded flat at 1.729 per dollar. The currency has appreciated about 35 percent so far this year, a thorn in the side of exporters who see their products growing pricier in overseas markets.

Yet recent interventions by the government, including a 2 percent tax on capital inflows into stocks and fixed-income investments and a 1.5 percent tax on American Depositary Receipts, has produced caution among investors.

The real "is presenting some stability more recently, failing to move no matter the direction. Apparently, the uncertainty caused by the capital control measures recently announced by the government is leaving the market more cautious to assume positions," according to a report from BNP Paribas dated Tuesday.

Among Brazilian stocks, heavyweights Petrobras and Vale led losses.

State-controlled energy company Petrobras (PETR4.SA) lost 0.64 percent to 38.60 reais as crude oil CLc1 slid 0.84 percent.

Mining company Vale (VALE5.SA), the world's largest producer of iron ore, declined 0.68 percent to 42.58 reais.

Steelmakers also fell. Gerdau (GGBR4.SA) dipped 0.85 percent to 28.06 reais, Usiminas (USIM5.SA) lost 0.37 percent to 49.12 reais and CSN (CSNA3.SA) slid 0.97 percent to 59.27 reais.

Yields on Brazilian interest rate futures contracts <0#DIJ:> largely dipped.

The yield on the contract due January 2011 DIJF1 slipped to 10.13 percent from 10.17 percent. The yield on the contract due July 2011 DIJN1 fell to 11.06 percent from 11.12 percent.

Both were among the morning's most traded contracts.

Investors use the contract to bet on trends in the country's benchmark interest rate, the Selic, currently at a record low 8.75 percent. (Reporting by Luciana Lopez; Editing by Kenneth Barry) ((luciana.f.lopez@thomsonreuters.com; Reuters Messaging: luciana.f.lopez.thomsonreuters.com@reuters.net; Tel: +5511-5644-7756))