EMERGING MARKETS-Brazil stocks fall on weak growth data

Fri Nov 30, 2012 7:00pm EST

* Brazil Q3 GDP growth much weaker than expected
    * Brazilian electric utilities up on government offer
    * Brazil Bovespa falls 0.65 pct, Mexico IPC down 0.61 pct


    By Danielle Assalve
    SAO PAULO, Nov 30 (Reuters) - Brazilian stocks slipped on
Friday after data showed Latin America's largest economy grew
far slower than expected in the third quarter, suggesting growth
estimates for this year and next could wilt.
    Latin America's major stock indexes eked out only minor
gains in November as they whipsawed down then back up on the
shifting outlook over the ability of U.S. lawmakers to avoid the
so-called fiscal cliff.
    Brazil's economy expanded just 0.6 percent in the third
quarter from the second quarter, according to government data
released on Friday. That was half the pace expected by analysts
and below all forecasts in a Reuters poll. 
    "Looking forward with this GDP data complicates the scenario
a bit. It will be difficult for Brazil to reach growth of 4
percent next year," said Alvaro Bandeira, a partner at Orama
Investments.
    Finance Minister Guido Mantega told reporters recently that
Brazil would implement new stimulus measures to help ensure 4
percent growth in 2013, but his credibility has eroded as his
optimistic forecasts have repeatedly failed to come true.
    After a sharp advance early in the year, Brazilian stocks
slumped hard as the economy slowed. Equities recovered a bit off
the lows, but they are still on track to post only a slight gain
for the year.
    Brazil's benchmark Bovespa stock index fell 0.65
percent on Friday as shares of steelmaker Gerdau 
dropped 4.42 percent and consumer goods manufacturer Hypermarcas
 shed 2.72 percent.
    The Bovepsa posted a slight dip for the week and about a 0.7
percent advance for the month. 
    Traders said markets in December would be driven by the
outlook on discussions by U.S. lawmakers on how to avert a
series of tax hikes and spending cuts set to take effect early
next year. Economists are concerned the automatic adjustment
could push the U.S. economy into recession.
    "If they reach an agreement to avoid the fiscal cliff, the
trend for the market will improve," said Luiz Roberto Monteiro a
trader at brokerage Renascença.
    Mexico could react the most to a negative outcome to the
talks, since it sends more than 80 percent of its exports to its
northern neighbor.
    "The market knows that if the United States falls, Mexico
will sink," said Alfredo Coutino, an economist at Moody's
Analytics.
    However, gains for Mexico may be limited on a positive
outcome to the U.S. talks since local stocks are trading near a
record high. Mexican equities have led gains in the region's
stocks as U.S. demand for local exports has shielded Mexico from
a wider global slowdown.
    In Friday's trading, shares of Brazil's state-run oil
company Petrobras dropped 2.56 percent. The company
canceled an order on Thursday for drill ships, cutting its $76
billion new rig program by almost a fifth. 
    Electric utilities lent support after Brazil's government
late Thursday offered greater compensation to the sector in
return for accepting sharply lower power rates as part of a
concession renewal deal. 
    "Even though the amount was less than what the companies
wanted, it's above what the government had proposed paying,"
said Joao Pedro Brugger, an analyst with Leme Investimentos in
Florianopolis, Brazil.
    Shares of Centrais Eletricas Brasileiras SA,
known as Eletrobras, jumped 23.56 percent.
    Mexico's IPC index fell 0.61 percent as
telecommunications firm America Movil lost 1.16
percent. The IPC clocked a 0.5 percent rise for November.
    Mexico's stock exchange issued a new weighting for the IPC
on Thursday, and traders said some dealers had been expecting
America Movil's weighting would rise more than it did.
    Chile's IPSA index edged up 0.06 percent as a 1.31
percent gain in shares of fertilizer, lithium and iodine
producer Soquimich was offset by a 1.65 percent loss
in shares of regional energy firm Enersis.
    
    Latin America's key stock indexes at 2330 GMT:
    
 Stock indexes                    daily %  year-to
                         Latest    change   date %
                                            change
 MSCI LatAm             3,580.31    -0.39    -0.61
                                           
 Brazil Bovespa        57,474.57    -0.65     1.27
                                           
 Mexico IPC            41,833.52    -0.61    12.83
                                           
 Chile IPSA             4,139.99     0.06    -0.90
                                           
 Chile IGPA            20,323.85    -0.01     0.96
                                           
 Argentina MerVal       2,419.30     0.46    -1.76
                                           
 Colombia IGBC         14,165.02     0.15    11.84
                                           
 Peru IGRA             20,044.62     -0.6     2.93
                                           
 Venezuela IBC        407,593.00    -0.17   248.26
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