EMERGING MARKETS-Mexico stocks fall sharply, Brazil rises on Vale
* Femsa off record high, Modelo hit by U.S. suit * Vale lifted by 'buy' call, Petrobras earnings seen weak * Brazil Bovespa gains 0.72 pct, Mexico IPC down 1.04 pct By Michael O'Boyle and Asher Levine MEXICO CITY/SAO PAULO, Jan 31 (Reuters) - Mexican stocks sank by the most in three months on Thursday as bottler Femsa slipped from a record high and brewer Modelo tumbled to a seven month low, while Brazilian stocks rose on gains in mining firm Vale. Still, Mexican stocks clocked their fifth consecutive monthly gain with shares trading around all-time highs, while Brazil posted its first monthly loss since October. Foreign investors have driven Mexican shares up 10 percent since-mid-November as surprisingly strong U.S. demand supported Mexico's economy and investors bet the new government will be able to push key economic reforms through a divided Congress. Yet, traders are leery that stocks can keep up their strong advance. Mexico's main IPC index shed 1.04 percent, but still ended up 3.5 percent in January. "The market is looking tired," said Gerardo Roman, head of trading at brokerage Actinver in Mexico City. Coca-Cola bottler and retailer Femsa slumped 3.21 percent in its biggest drop in more than six months after Morgan Stanley cut back its recommendation on the stock to "equal-weight" from "overweight." Femsa stock has more than doubled since 2011, and analysts said the share price had gotten ahead of the company's real growth prospects. Modelo, the brewer of Corona beer, fell 6.76 percent to 108.19 pesos after the U.S. Justice Department filed a lawsuit seeking to stop Anheuser-Busch Inbev SA from buying the half of Modelo that it does not already own. Modelo shares saw their biggest trading volume since the deal was announced last June. Roman said the stock would likely rebound off current levels. "It is still a money-making machine," he said. "It is a super buy anywhere near 105 pesos," where the stock was trading last June before news of the sale. Brazil's benchmark Bovespa stock index rose 0.72 percent as iron-ore miner Vale rose 3.78 percent, after Bank of America Merrill Lynch raised its recommendation on the firm's U.S.-traded shares to a "buy." The Bovespa shed nearly 2 percent during the month amid signs that Latin America's top economy is struggling to grow even after the central bank slashed interest rates last year to a record low. Fears over government intervention in the economy, energy rationing, mediocre economic growth and high inflation have soured many investors on Brazilian stocks, said Clodoir Vieira, chief economist with brokerage Souza Barros in Sao Paulo. "February will be a very tough month. The outlook will depend heavily on corporate results, but I think it should be better than January," Vieira said. Shares of state-controlled oil company Petroleo Brasileiro SA, known as Petrobras, slid for the fourth straight session, losing 0.66 percent. The shares dropped their most in seven months in the previous session after a fuel price rise failed to ease investor concerns about the health of the company's finances. Ariovaldo dos Santos, manager of equities at brokerage H.Commcor said Petrobras would likely post weak earnings, due on Monday. "The scenario is quite volatile and will depend on the results that will come out," he said. Latin America's key stock indexes at 2200 GMT: Stock indexes daily % YTD % Latest change change MSCI LatAm 3,937.81 0.59 3.69 Brazil Bovespa 59,761.49 0.72 -1.95 Mexico IPC 45,278.06 -1.04 3.60 Chile IPSA 4,552.40 0.24 5.84 Chile IGPA 22,167.63 0.26 5.21 Argentina MerVal 3,462.42 -0.22 21.31 Colombia IGBC 14,981.55 -0.09 1.81 Peru IGRA 21,435.29 0.61 3.91 Venezuela IBC 494,771.47 -0 4.95
- Putin dissolves state news agency, tightens grip on Russia media
- North Korea says Kim's powerful uncle dismissed for 'criminal acts'
- Thai PM calls snap election, protesters want power now |
- Record cold, ice grip U.S.; more snow to blanket East
- Protesters fell Lenin statue, tell Ukraine's president 'you're next'