EMERGING MARKETS-Latam stocks fall as Brazil shares hit resistance

* Petrobras hurts Bovespa, Mexico's rebalancing hit shares
* Brazil Bovespa off 0.62 pct, Mexico IPC down 0.63 pct

By Danielle Assalve and Rachel Uranga
SAO PAULO/MEXICO CITY, Aug 21 (Reuters) - Latin American
shares slipped on Tuesday, tracking a narrow fall in U.S.
markets with Brazil's benchmark Bovespa index hitting resistance
and weighed down by state-owned oil giant Petrobras.
The MSCI Latin American stock index slipped
0.43 percent, falling for the third straight session to
3,653.92.
Latin American stocks had risen early in the session, buoyed
by speculation that the European Central Bank would act to lower
Spanish and Italian borrowing costs. The optimism prompted the
Bovespa to flirt with a three-month high, but it fizzled and
indexes reversed course mid-session.
Petrobras drew down Brazil's Bovespa, capping its
second straight daily gain to end down 0.62 percent to
58,917.73.
"The index has an important resistance at 60,000 points,"
said Henrique Kleine, chief analyst at Magliano brokerage in Sao
Paulo. "If you see an announcement of stimulus, the index could
find more room to rise, but otherwise it may fall back and
fairly close to 50,000 points."
Market players are eyeing meetings in the next month of the
Federal Reserve and European Central Bank that they hope will
offer monetary stimulus to boost a sagging local economy and
help control the euro zone debt crisis.
The chief executive of Petrobras, the Brazilian
index's most heavily weighted stock, said it was not in talks
with the government to raise fuel prices. The comments sent
shares south, losing 1.58 percent on the day.
In June, the government allowed the company to impose modest
price increases for the first time in eight years. Despite the
rise in wholesale gasoline and diesel, a gap between local and
international fuel prices remain, contributing to the company's
losses.
Helping limit losses on the Bovespa, homebuilder Gafisa
rose 5.38 percent, while rival PDG Realty
added 1.08 percent.
"Gains in the homebuilding sector are an important yardstick
for the entry of foreign capital," said Hamilton Alves, a senior
analyst with BB Investimentos in Sao Paulo. "Today we are
clearly seeing foreign investors returning to the stock market."
Net foreign fund flows into the Bovespa totaled 2 billion
reais in the month through Aug. 17 as increasing risk appetite
led investors to Brazil in search of higher returns. If the
trend continues, August would be the first month with a net
inflow of foreign funds since April.
Mexico's IPC index fell 0.63 percent, losing ground
for a fourth straight session.
Mexican telecommunications giant America Movil
weighed on the index, dropping 1.46 percent while conglomerate
Alfa lost 2 percent. The company lost weight in the
IPC after a routine rebalancing of shares in the index.
"This impact is affecting the IPC on the downside, this
question of technical rebalancing," said Carlos Alonso, a trader
at Interacciones in Mexico City.
Shares of cement maker Cemex climbed 1.68
percent after the company said it was near completing a massive
refinancing deal that will help it get a handle on $7.2 billion
in debt maturing in 2014.
In Chile, the benchmark IPSA stock index ended down
0.29 percent.

Latin America's key stock indexes at 2140 GMT:

MSCI Latam 3,653.92 -0.43 1.43

Brazil Bovespa 58,917.73 -0.62 3.81

Mexico IPC 40,096.64 -0.63 8.14

Chile IPSA 4,262.04 -0.29 2.02

Chile IGPA 20,578.35 -0.24 2.23

Argentina MerVal 2,441.23 -0.76 -0.87

Colombia IGBC 14,270.02 0.17 12.67

Peru IGRA 20,304.73 0.98 4.27

Venezuela IBC 291,761.00 0.32 149.29