EMERGING MARKETS-Latam stocks weaken on Spain, commodities

Mon Apr 16, 2012 1:59pm EDT

* Stock markets down with few positive foreign signals

* Weaker China growth, lower oil price weigh on commodities

* Shares in Mexico's Elektra tumble for third straight day

By Peter Murphy

BRASILIA, April 16 (Reuters) - Latin American stocks fell on Monday on worries about Spain's rising borrowing costs, with Brazil's commodity-heavy index also burdened by falling oil prices and slowing Chinese growth.

Brazil's Bovespa index was down 0.64 percent while Mexico's IPC index fell 0.73 percent. Chile's blue-chip IPSA index lost 0.63 percent.

"It's (Spain) mostly affecting stocks in Europe but it's passing by the Bovespa too with the perception it will heighten risk," said José Francisco de Lima Gonçalves, chief economist at Banco Fator in Sao Paulo who said much of Monday's trading in Brazil was focused on oil and iron ore giants Petrobras and Vale.

Signals from abroad were mixed. Renewed worries about Spain's fiscal problems and a resurgent euro zone crisis overshadowed optimism roused by higher-than-expected U.S. retail sales. The U.S. growth picture was muddied by data showing New York state's manufacturing slowed sharply in April.

Brazil's state-controlled oil company Petrobras was down 0.97 percent. The June Brent oil futures price fell more than $2 on Monday.

The world's largest iron ore miner Vale shed 1.56 percent. China, its biggest customer, announced on Friday that its economy grew at its slowest in nearly three years in the first quarter. That could cool demand for China's purchases of iron ore from Brazil.

Gonçalves said recent statements from Brazil's government in which it called for banks to reduce spreads, or the margin they earn between the interest they earn on loans and what they pay to depositors, was dragging on banks.

Shares in state-controlled Banco do Brasil were trading 0.73 percent lower on Monday.

In Mexico, retailer Grupo Elektra fell 9.1 percent at one point, its third straight day of sharp drops. The exchange said last week it would make changes that would cut the weight of the company's shares in its benchmark index, leading to a sell-off among investors who seek to match the index's returns.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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