EMERGING MARKETS-Latam stocks to 2-month low; worst week since May

Fri Nov 9, 2012 7:52pm EST

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* Latam stocks cap worst week in six months
    * Mexico, Brazil pierce 100-day simple moving averages
    * Brazil Bovespa down 0.29 pct, Mexico IPC off 0.38 pct


    By Michael O'Boyle and Asher Levine
    MEXICO CITY/SAO PAULO, Nov 9 (Reuters) - Latin American
stocks fell to their lowest point in more than two months on
Friday, capping a weak of losses that left the region's main
indexes just above key support levels.  
     Solid Chinese and U.S. economic data on Friday failed to
offset fears about fiscal woes in the United States and Europe. 
    The MSCI Latin American stock index fell
0.75 percent as the gauge closed out its worst week in six
months with a loss of about 2.7 percent.
    Mexico's IPC stock index closed below its 100-day moving
average. After outperforming other emerging markets and hitting
record highs in early October, Mexican stocks could face a
further slump, traders and analysts said.
    "The drop in Mexico is going to be steeper than the other
markets," said Gerardo Roman, head of trading at brokerage
Actinver, who said Mexico's IPC could catch up to other markets
that are already trading below their 200-day moving averages.
    Shares fell this week as investors looked past U.S.
President Barack Obama's re-election toward the tough talks
needed in a divided Congress to avoid a "fiscal cliff" of
spending cuts and tax rises due in January.
    Friday's losses came despite data on Friday showing China's
economy gained traction in October, while the Thomson
Reuters/University of Michigan survey showed U.S. consumer
sentiment rose to its highest level in more than five years.
    China is Brazil's No. 1 trading partner and top purchaser of
Latin American commodities, while Mexico sends most of its
exports to its northern neighbor. 
    "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."
    Brazil's benchmark Bovespa stock index fell 0.29
percent to 57,357.71, crossing below its 100-day simple moving
average, a level that has buoyed the index during the last two
months of rocky trading.
    Daniel Marques, a chart analyst at brokerage Agora, warned
that a break lower below support levels around 56,200 points
could portend a fall back to the year's lows. However, cheap
prices could tempt bargain hunters into the market. 
    "There is a good chance for a rebound," he wrote in a note.
    Homebuilder PDG Realty shed 2.92 percent on
Friday as Bank of Brazil lost 2.33 percent.
    Hypermarcas SA, the largest Brazilian producer of
disposable consumer goods, fell 2.11 percent, while retailer Cia
Hering SA slipped 4.68 percent on concerns that tax
changes could hit their earnings. 
    Brazil's Braskem SA, Latin America's largest
petrochemical company, lost 4.75 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.
    "Foreign investors are taking their money and putting it in
other emerging markets where they have more stable ground
rules," 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.
    Mexico's IPC index dropped 0.38 percent to 40,677.07.
Billionaire Carlos Slim's America Movil slipped 0.69
percent and miner Grupo Mexico lost 1.33 percent
    Fanuel Fuentes, a technical analyst at brokerage Monex,
warned that a break of the 40,200 and 40,000 levels could signal
steeper losses to follow.
    Chile's IPSA index slipped for a third straight day,
down 0.29 percent as retailer Falabella fell 0.72
percent and regional energy group Enersis dropped 2.75
percent.

    Latin America's key stock indexes at 0000 GMT:
    
 Stock indexes                      daily %  year-to
                         Latest      change   date %
                                              change
 MSCI LatAm               3,591.42    -0.75     -0.3
                                             
 Brazil Bovespa          57,357.71    -0.29     1.06
                                             
 Mexico IPC              40,677.07    -0.38     9.71
                                             
 Chile IPSA               4,237.78    -0.29     1.44
                                             
 Chile IGPA              20,736.35     -0.2     3.01
                                             
 Argentina MerVal         2,390.05    -0.49    -2.95
                                             
 Colombia IGBC           14,304.94    -0.05    12.94
                                             
 Peru IGRA               21,046.16    -0.33     8.08
                                             
 Venezuela IBC          368,312.22      1.3   214.70
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