EMERGING MARKETS-Brazilian stocks slip as Spain worries weigh

Tue Oct 2, 2012 6:47pm EDT

Related Topics

* Brazil industrial output rises less than expected
    * Brazil Bovespa slips 0.59 pct; Mexico's IPC up 0.18 pct


    By Michael O'Boyle
    MEXICO CITY, Oct 2 (Reuters) - Latin American stocks traded
mixed on Tuesday amid uncertainty over when Spain might apply
for a bailout and after Brazil reported disappointing growth in
industrial production.
    Brazil's Bovespa index slipped 0.59 percent to
59,222.08 points, hurt by a nearly 11 percent plunge in shares
of airline Gol. The Bovespa has slipped about 4.6 percent since
mid-September after a strong rally.
    Brazil reported that industrial production expanded by 1.5
percent in August compared with the previous month, the fastest
pace in 15 months thanks to heavy government stimulus but below
expectations for 2 percent growth.
    An economic slowdown in Brazil, Latin America's top economy,
spurred steep losses in the country's equities earlier this
year, and investors are still wary about signs of a rebound.
    "I think we need to string some more data together to say we
have hit the bottom," said Geoffrey Pazzanese, who helps manage
$720 million in global stocks at Federated Investors.
    Two weeks ago Brazil-focused funds saw their biggest inflows
in two years. But new investments flagged last week,
underscoring the lack of conviction in further gains.
    "I do not think we are going to see steady flows into Brazil
until we see some stability in China," Pazzanese said.
    China is Brazil's biggest export market, and commodity
exporters account for about two-fifths of the Bovespa.
    Comments from Spanish Prime Minister Mariano Rajoy that a
request for European aid was not imminent also weighed on
sentiment, traders said.  
    Investors fear that a delay in a request for aid from Spain,
which would allow the European Central Bank to buy its bonds,
could further complicate the euro-zone debt crisis.
    "The stock market suffers with this uncertainty. The market
will be skating along, waiting to see what happens," said
analyst Hamilton Alves at BB Investimentos in Sao Paulo. 
    The Bovespa slipped below its 200-day simple moving average
last Friday, and the index has been unable to hold onto fleeting
intraday gains above the measure in the last two sessions.
    Shares in OGX, the oil firm controlled by
Brazilian billionaire Eike Batista, fell 3.17 percent while
homebuilder Gafisa shed 8.31 percent.
    Gol fell 10.9 percent, erasing a big jump on
Monday triggered by speculation it would sell a stake to a
larger rival. Instead, after markets closed on Monday the
company announced plans to order 60 new jets from Boeing Co.
. 
    Shares of Grupo Oi, Brazil's largest fixed-line
carrier, jumped 4.21 percent after it agreed to dispose of 643
million reais ($317 million) worth of real estate property to
reduce debt.
    Meanwhile, gains in Mexico and Chile helped lift the MSCI
Latin American stock index by 0.2 percent.
    Mexico's IPC index rose 0.18 percent as shares in
cement maker Cemex gained 1.01 percent and bank
Banorte rose 0.61 percent, extending Monday's
jump.
    In contrast to the recent dip in Brazilian stocks, the IPC
has gained about 4.5 percent this month to close Tuesday about 1
percent off the all-time high hit in July.
    Chile's IPSA index gained 0.31 percent, supported by
a 1.99 percent gain in shares of industrial conglomerate Copec
.
    
    Latin America's key stock indexes at 2100 GMT:
 Stock indexes                         daily %  year-to-
                         Latest         change     ate %
                                                  change
 MSCI LatAm                 3,705.13       0.2      2.86
                                                
 Brazil Bovespa            59,222.08     -0.59      4.35
                                                
 Mexico IPC                41,199.29      0.18     11.12
                                                
 Chile IPSA                 4,245.39      0.31      1.62
                                                
 Chile IGPA                20,626.17       0.3      2.47
                                                
 Argentina MerVal           2,464.74      0.25      0.09
                                                
 Colombia IGBC             14,211.93      0.79     12.21
                                                
 Peru IGRA                 21,674.79     -0.28     11.31
                                                
 Venezuela IBC            340,996.16      7.65    191.36
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