EMERGING MARKETS-Latam stocks fall on 'fiscal cliff' and Europe
* Brazil Bovespa drops 0.31 pct, Mexico IPC down 0.36 pct * U.S. fiscal policy and Greece aid weigh on investors * China's economy gains traction with improvements By Asher Levine and Danielle Assalve SAO PAULO, Nov 9 (Reuters) - Latin American stocks fell to their lowest point in more than two months on Friday, after positive economic data from China failed to offset concerns over fiscal problems in the United States and Europe. The MSCI Latin American stock index fell 1 percent, with retailers and consumer products makers driving Brazil's Bovespa index to its third straight loss and retailer Wal-Mart de Mexico weighing on Mexico's bourse. Shares tracked global markets lower with investors focused on the U.S. "fiscal cliff" -- a combination of government spending cuts and tax rises to come into effect by law in early 2013 that may cut the federal budget deficit but also tip the economy back into recession. The issue is one of the toughest facing President Barack Obama following his re-election on Tuesday. The losses came despite data on Friday showing China's economy gained traction in October, with a better than expected improvement in industrial output, fixed asset investment and retail sales. China is Brazil's No. 1 trading partner and purchaser of Latin American commodities. "The market is worried ... unsure about the negotiating conditions that Obama is going to face," said Paulo Veiga, a director at Mercatto Gestão de Recursos in Rio de Janeiro. "That is overshadowing everything else right now." Fresh concerns that Greece may not immediately secure a deal to unlock access to urgently needed international aid also added to risk aversion, driving investors away from emerging market stocks. Brazil's benchmark Bovespa stock index fell 0.31 percent to 57,343.34 while crossing below its 100-day simple moving average, a technical support level that has buoyed the index for two months. Hypermarcas SA, the largest Brazilian producer of disposable consumer goods, fell 2.4 percent, while retailer Cia Hering SA slipped 3.5 percent. Operating earnings may decline at the companies if the government moves forward with a plan to unify and redistribute state value-added taxes on interstate transactions, Bank of America Merrill Lynch analysts wrote on Friday. Brazil's Braskem SA, Latin America's largest petrochemical company, slipped 2.6 percent after Chief Executive Carlos Fadigas said on a Friday conference call that he expects demand for plastic resins to decline about 8 percent in the fourth quarter from the prior three months. Brazil's Bovespa has fallen nearly 8 percent since mid-September, with foreign investors taking 1.23 billion reais ($600 million) out of the market in October. "If there is no money coming in, you can have the best news in the world but the market is going to fall," said Carlos Manuel Pereira de Sousa, a strategist with Lopes Filho e Associados in Rio de Janeiro. Sousa pointed to investor discomfort over unpredictable government intervention in the private sector as a key barrier to attracting funds from abroad. "Foreign investors are taking their money and putting it in other emerging markets where they have more stable ground rules," he said. Mexico's IPC index dropped 0.36 percent to 40,682.55. Heavyweight stocks America Movil and Wal-Mart de Mexico fell 0.6 percent and 0.9 percent, respectively. Shares of cement maker Cemex were little changed after the company said on Thursday that it was pleased with the way its U.S. business was evolving but acknowledged it is still far from fully recovering. Chile's IPSA index slipped for a third straight day as retailer Falabella fell 0.8 percent and regional energy group Enersis dropped 0.6 percent. Latin America's key stock indexes at 1433 GMT: Stock indexes daily % YTD % Latest change change MSCI LatAm 3,582.36 -1 0.46 Brazil Bovespa 57,343.34 -0.31 1.04 Mexico IPC 40,682.55 -0.36 9.72 Chile IPSA 4,234.53 -0.36 1.36 Chile IGPA 20,720.97 -0.28 2.94 Argentina MerVal 2,395.43 -0.26 -2.73 Colombia IGBC 14,268.98 -0.30 12.66 Peru IGRA 21,135.90 0.1 8.54 Venezuela IBC 363,575.72 0 210.65
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