EMERGING MARKETS-Latam stocks dip on U.S. debt talk worries

Tue Jan 15, 2013 5:29pm EST

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* Bernanke warns of risks if debt negotiations stall
    * Brazil Bovespa falls 0.57 pct, Mexico IPC down 0.26 pct


    By Michael O'Boyle
    MEXICO CITY, Jan 15 (Reuters) - Latin American stocks
slipped on Tuesday on concerns over debt negotiations in the
United States, and analysts warned that growing uncertainty
about the U.S. talks could drag Mexican equities down more.
    Mexico, which sends nearly 80 percent of its exports to the
United States, could be particularly vulnerable if U.S. debt and
budget negotiations hurt the U.S. economy.
    The main stock index in Mexico has dipped since hitting a
record closing high on Friday after gaining more than 10 percent
since the middle of last November. 
    "The market here in Mexico should show some correction in
the short term," said Rodolfo Campuzano, head of analysis at
brokerage Invex in Mexico City, noting Mexican stocks were
trading at high valuations similar to those seen before the
sharp plunge in 2008 and a more modest drop in 2010.
    Federal Reserve Chairman Ben Bernanke said on Monday that
any failure to reach an accord on the debt ceiling could put a
recovery in the world's largest economy at risk. Credit ratings
firm Fitch said the U.S. faces a "material risk" of losing its
triple-A status if negotiations stall.
    Mexico's IPC index fell 0.26 percent to 44,748.06
points as broadcaster Televisa lost 1.58 percent
and industrial conglomerate Alfa shed 1.42 percent.
    Brazil's benchmark Bovespa stock index fell 0.57
percent to 61,727.61, a day after rising 1 percent gain.
    "Despite today's fall, the trend is still for a gain," said
Daniel Marques, a technical analyst with Agora Corretora in Rio
de Janeiro. "Volume is strong and we should hit a yearly high
soon, though much will depend on what happens in the United
States."
    A slowdown in Latin America's biggest economy last year
sapped demand for Brazilian stocks, which lagged far behind
other Latin American equity markets such as Mexico and Colombia.
    Some analysts expect Brazil has more room to rise this year
as government stimulus measures take effect. Moreover, Brazilian
stocks look cheaper than Mexico and other markets, with the
Bovespa about 15 percent below its 2010 record high.
    Shares of OGX, the oil company controlled by
Brazilian billionaire Eike Batista, fell 2.99 percent and
contributed most to the index's losses. The stock had rallied
more than 11 percent in the last three sessions.
    Shares of homebuilder Gafisa SA jumped 6.12
percent after the company on Monday reported a strong rebound in
new launches and sales in the fourth quarter. 
    Gafisa shares look attractive after the company generated
more free cash flow than expected by reselling low-income units
with previously canceled contracts, analysts at Bank of America
Merrill Lynch told clients in a Tuesday note. 
    Chile's IPSA index fell for the second session in
three, losing 0.11 percent to 4,450.21 as shares of industrial
conglomerate Copex fell 1.67 percent.
    
    Latin America's key stock indexes at 2150 GMT: 
 Stock indexes                          daily %        YTD %
                         Latest          change       change
 MSCI LatAm                   3,902.32    -0.71         2.75
                                                 
 Brazil Bovespa              61,727.61    -0.57         1.27
                                                 
 Mexico IPC                  44,748.06    -0.26         2.38
                                                 
 Chile IPSA                   4,450.21    -0.11         3.46
                                                 
 Chile IGPA                  21,719.73    -0.11         3.08
                                                 
 Argentina MerVal             3,082.40    -0.41         7.99
                                                 
 Colombia IGBC               14,766.26     0.06         0.34
                                                 
 Peru IGRA                   21,735.27    -0.62         5.36
                                                 
 Venezuela IBC              477,790.28     0.86         1.35
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