EMERGING MARKETS-Latam stocks drop on Greece, profit-taking

Mon Nov 26, 2012 5:49pm EST

Related Topics

* IMF, European policymakers meet to discuss Greek debt plan
    * Commodities shares drop following previous week's gains
    * Brazil Bovespa falls 1.45 pct, Mexico IPC flat

    By Danielle Assalve and Gabriel Stargardter
    SAO PAULO/MEXICO CITY, Nov 26 (Reuters) - Latin American
stocks fell on Monday, with uncertainty over the release of
bailout funds for Greece and a lack of resolution surrounding
the U.S. "fiscal cliff," fueling profit-taking after last week's
strong gains. 
    Oil producers and home builders drove Brazil's benchmark
Bovespa index to its first loss in three sessions, while
Mexico's IPC index edged lower.
    After five straight sessions of gains last week in which the
index added 2.9 percent, the MSCI Latin American stock index
 dropped 0.6 percent to 3,581.78.
    Shares fell as euro zone finance ministers and the
International Monetary Fund met to discuss the best way to cut
Greece's heavy debt load, a prerequisite for releasing a
critical bailout package to the country. 
    Uncertainty over the deal drove investors to book profits in
shares of the most widely-traded commodities firms.
    "After a week in which global markets recovered, the market
is reversing some of those gains, while waiting for a resolution
to the Greece problem," said Joao Pedro Brugger, an analyst with
Leme Investimentos in Florianopolis. 
    However, after the market close euro zone finance ministers
and the International Monetary Fund reached agreement that Greek
public debt should fall to 124 percent of GDP in 2020 through a
package of extra debt cutting measures totalling 20 percent of
GDP, officials said.  
     The so-called U.S. "fiscal cliff," which could result in
tax increases and spending cuts early next year if policymakers
fail to agree on a solution, continued to dampen markets with
analysts urging a speedy resolution to stimulate domestic trade.
    "The story has not changed because we thought there would be
an agreement, and now we're dealing with the sad reality," said
Gerardo Roman, head of stock trading at Mexico City's Actinver
brokerage. " took some holiday so let's see what
happens this week."
    On Monday, a technical momentum indicator known as slow
stochastics flashed a "bearish cross" in overbought territory,
suggesting shares may fall further in coming days.
    Brazil's benchmark Bovespa stock index dropped its
most in a week, losing 1.45 percent to 56,737.10.
    Shares of state-controlled oil company Petrobras 
lost 1.83 percent after the company said on Monday that output
of petroleum and natural gas fell for a fifth straight month in
October compared with a year earlier. 
    Rival oil producer OGX Petroleo e Gas Participacoes SA
, controlled by Brazilian billionaire Eike Batista,
lost 5.34 percent, returning part of the over 7 percent gains it
posted last week while preferred shares of iron-ore miner Vale
 shed 0.5 percent.
    Builder PDG Realty SA lost 5.37 percent. 
    Shares of Centrais Eletricas Brasileiras SA,
better known as Eletrobras, rose 4.16 percent as investors
struggled to arrive at a stable price for the stock following a
recent sell-off.
    Eletrobras shares plunged nearly 50 percent this month on
expectation that a plan for hydro dam concession renewal and
related power-rate cuts will slash revenue, profit and
investment. 
    Still, the company plans to bid for new electricity
generation and transmission rights, a source close to the
company told Reuters on Monday. 
    Shares of state-controlled Banco do Brasil SA 
rose 1.77 percent after the bank said on Monday that it will
sell shares in a newly-formed insurance and pension unit in a
move to tap growth in a fast-growing industry. 
    "It's a positive thing as the insurance sector is expanding
strongly in Brazil and Banco do Brasil has a large client base,"
said Henrique Florentino, an analyst with Um Investimentos in
Sao Paulo, who highlighted the benefits of a capital injection
in the company. 
    Mexico's IPC index lost 0.1 percent as a 0.68 percent
gain by retailer and beverage company Femsa helped
offset a 1.08 percent drop in shares of telecommunications firm
America Movil.
    Shares of plastic pipe maker Mexichem rose 0.6
percent after the company said on Friday that shareholders had
approved a dividend of 0.48 peso per share. 
    Chile's IPSA index fell 0.25 percent as shares of
industrial conglomerate Copec fell 1.8 percent.
    
    Latin America's key stock indexes at 2151 GMT:
    
 Stock indexes                                       % change
                              Latest            
                                                             
 MSCI LatAm                        3,581.78              -0.6
                                                
 Brazil Bovespa                   56,737.10             -1.45
                                                
 Mexico IPC                       41,878.27              -0.1
                                                
 Chile IPSA                        4,132.75             -0.25
                                                
 Chile IGPA                       20,322.20             -0.21
                                                
 Argentina MerVal                  2,339.92              4.34
                                                
 Colombia IGBC                    14,102.10             -0.55
                                                
 Peru IGRA                        20,211.52             -0.08
                                                
 Venezuela IBC                   393,369.78               2.2
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