EMERGING MARKETS-Brazil stocks hit over 3-month low, break support

Fri Nov 16, 2012 7:34pm EST

* Brazilian stock index technical outlook darkens
    * Brazil Bovespa down 1.56 pct, Mexico IPC up 0.63 pct


    By Danielle Assalve
    SAO PAULO, Nov 16 (Reuters) - Brazilian stocks dropped to a
more than three-month low on Friday, closing below a support
level that could augur for a steeper fall ahead, while Mexican
stocks tracked Wall Street higher. 
    The MSCI Latin American stock index fell
0.72 percent to close at its lowest level since July.
    Brazilian stocks slumped nearly 3.5 percent this week after
data showed weaker than expected retail sales in September in
Latin America's top economy while economic activity slipped that
same month for the first time in five months.
    The data cast doubt on the strength of Brazil's economic
recovery while disappointment with some quarterly earnings also
weighed on sentiment.
    Brazil's benchmark Bovespa index lost ground for the
sixth session in seven, dropping 1.56 percent on Friday to close
at 54,402.33, below an important support level at 56,200. 
    "The Bovespa index's short-term outlook continues to get
worse," analyst Daniel Marques at brokerage Agora wrote in a
report. "The break could lead to a sell-off in search of the
year's low at 52,200," or another 4 percent lower.
    Brazil's state-run power utility Eletrobras 
posted an 11.5 percent drop, its biggest loss since November
2008, after the company said it will forgo 9.6 billion reais
($4.7 billion) in annual revenue as a result of government plans
to cut power rates. 
    TIM Participacoes, Brazil's No. 2 wireless
carrier, fell 5.11 percent as regulators ordered the wireless
carrier to stop selling a flat-rate promotional plan because of
concerns about service quality. 
    Homebuilder PDG Realty fell 7.32 percent to a
six-month low as its chief executive said the company may have
to account for more of the cost overruns that triggered losses
in recent quarters. 
    Mexico's IPC index reversed early losses to rise 0.63
percent to 40,830.60 points as retailer Wal-Mart de Mexico
 rose 1.27 percent while copper miner Grupo Mexico
 added 1.76 percent.
     Talks between U.S. President Barack Obama and congressional
leaders eased some worries about the U.S. government's fiscal
problems, helping Wall Street and Mexico rise after Brazil's
market had closed. 
    Mexico sends most of its exports to its northern neighbor
and stronger than expected U.S. demand has helped shield Mexico
from a wider global slowdown.
    Data on Friday showed Latin America's second biggest economy
slowed in the third quarter, but was still on track to grow
nearly 4 percent this year, underscoring the relative strength
of the economy and its attraction to investors. 
    Mexico's top cement maker Cemex slipped 0.26
percent as its affiliate Cemex Latam Holdings debuted
on the Colombian stock exchange with a 2.04 percent loss.
    Earlier this month, Cemex, one of the world's top cement
makers, said it had raised about $1.1 billion by selling a
bigger-than-expected stake of its Latam unit in a Colombian
initial public offering. 

    Latin America's key stock indexes at 2330 GMT:   
 Stock indexes                      daily %  year-to
                         Latest      change   date %
                                              change
 MSCI LatAm               3,502.23    -0.72    -2.78
                                             
 Brazil Bovespa          55,402.33    -1.56    -2.38
                                             
 Mexico IPC              40,830.60     0.63    10.12
                                             
 Chile IPSA               4,184.85    -0.05     0.18
                                             
 Chile IGPA              20,539.78        0     2.04
                                             
 Argentina MerVal         2,283.09    -1.68    -7.29
                                             
 Colombia IGBC           14,093.91    -0.70    11.28
                                             
 Peru IGRA               20,044.00    -0.25     2.93
                                             
 Venezuela IBC          383,419.13     1.51   227.61
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