EMERGING MARKETS-Latam stocks drop ahead of U.S. elections

Mon Nov 5, 2012 10:10am EST

Related Topics

* Obama, Romney deadlocked ahead of Tuesday's election
    * Greece debt crisis back in spotlight ahead of key vote
    * Brazil electrics fall on gov't compensation plan
    * Brazil Bovespa drops 0.7 pct, Mexico IPC up 0.16 pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, Nov 5 (Reuters) - Latin American stocks fell on
Monday as uncertainty over upcoming elections in the United
States and worries over Greece's debt crisis sapped demand for
riskier assets.
    The MSCI Latin American stock index lost for
the first session in three, dropping 0.5 percent to 3,674.51.
    Electric utilities drove Brazil's benchmark Bovespa index
 to its second losing session in three while
telecommunications firm America Movil buoyed Mexico's
bourse.
    Shares slipped as markets across the region reopened after 
national holidays on Friday, with investors turning their
attention to the outcome of Tuesday's U.S. presidential
elections. Recent polls show President Barack Obama and
Republican challenger Mitt Romney nearly deadlocked.
 
    "The volatility is coming from uncertainty over the U.S.
elections," said Pedro Galdi, chief strategist at SLW Corretora
in Sao Paulo. "While Obama has a slight advantage it's still
possible we could see a situation like Bush vs Gore which could
take weeks to be decided."
    Galdi said investors were also nervous ahead of a vote in
Greece on Wednesday on unpopular cost cuts and tax hikes that
are required in exchange for further international aid. The
measure is expected to scrape through parliament. 
    Brazil's benchmark Bovespa stock index fell 0.7
percent to 57,973.22 as shares of widely traded commodities
firms Vale and OGX slipped.
    Shares of electricity firms weighed on the index
after an offer from Brazil's government to compensate the
companies as part of a concession renewal plan fell short of
what some firms expected to receive. 
    Brazilian state-run electricity holding company Eletrobras
 plunged over 8 percent after the government's offer
came to less than half what Eletrobras, which is appealing the
decision, had expected. 
    "The situation is still cloudy for electric utilities and
the sector as a whole is suffering from that," said Ariovaldo
Santos, an equities manager at H. Commcor in Sao Paulo.
    Shares of electric utility CESP fell 10 percent,
while those of rival CTEEP dropped 5.5 percent.
    Units of Banco Santander Brasil SA fell 2.5
percent after analysts at Bank of America Merrill Lynch trimmed
their recommendation to "underperform" from "neutral" on concern
that delinquencies at the bank will not ease as quickly as
expected and that a decline in borrowing costs in Brazil will
weigh on revenue for the next two years. 
    Mexico's IPC index posted a slight gain, rising 0.16
percent to 41,828.81 as shares of telecommunications firm
America Movil, controlled by billionaire Carlos Slim, rose 1.3
percent.
    Chile's IPSA index dropped its most in two weeks,
losing 0.22 percent. Banco de Credito e Inversiones 
fell 1.3 percent, contributing most to the IPSA's losses, while
energy group Enersis rose 0.7 percent, helping support
the index. 
    
    Latin America's key stock indexes at 1434 GMT:
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,674.51       -0.5       2.52
                                                  
 Brazil Bovespa             57,973.22       -0.7       2.15
                                                  
 Mexico IPC                 41,828.81       0.16      12.81
                                                  
 Chile IPSA                  4,256.90      -0.22       1.90
                                                  
 Chile IGPA                 20,876.99      -0.16       3.71
                                                  
 Argentina MerVal            2,392.91      -0.09      -2.83
                                                  
 Colombia IGBC              14,379.46      -1.03      13.53
                                                  
 Peru IGRA                  20,868.55       0.01       7.16
                                                  
 Venezuela IBC             359,426.50       0.01     207.11
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