EMERGING MARKETS-Brazil stocks fall to 10-week low on rate hike bets
* Brazil's Bovespa down 0.3 pct, Mexico's IPC gains 0.6 pct * America Movil rebounds from sharp loss to 1-1/2 year low MEXICO CITY, Feb 15 (Reuters) - Brazilian stocks fell to a 10-week low on Friday on concerns the central bank could tighten monetary policy this year to fight inflation while Latin America's top economy is still struggling to revive sluggish growth. Mexican stocks rose as billionaire Carlos Slim's America Movil bounced back from a 1-1/2 year low it hit after investors dumped the stock following a surprisingly weak earnings report. Brazil's Finance Minister Guido Mantega on Friday expressed concern about Brazil's inflation rate, fueling market bets that the central bank could raise interest rates this year. Yields on interest rate futures rose sharply as investors priced in the chance for an interest rate hike as soon as May. Brazil slashed its benchmark interest rate to a record low last year as the economy stumbled, but growth has been slow to recover. "Monetary policy hasn't brought results, inflation is rising, the government is trying to solve it with interventions in some sectors, and all that is pushing investors away," said Joao Pedro Brugger, an analyst with Leme Investimentos in Florianopolis, Brazil. Brazil's benchmark Bovespa stock index fell 0.3 percent to 57,903.30 points. The index clocked its fourth straight weekly loss, losing 1 percent this week, and is down nearly 5 percent this year. On Friday, shopping center operator BR Malls Participações SA fell 4.44 percent while homebuilder Gafisa SA shed 3.08 percent. Higher interest rates could dampen consumer demand for goods and housing. Meanwhile, bank shares rose, since lenders usually make larger profits when interest rates are higher. Itau Unibanco Holding SA, Brazil's largest non-government bank, added 4.64 percent, while rival Banco Bradesco gained 4.42 percent. Analysts cited more favorable conditions for banks under a higher interest rate scenario, in which they would gain more from holdings of interest-rate-linked government debt and face decreasing government pressure to reduce lending spreads. Mexico's IPC index rose for the first day in five, adding 0.63 percent to 44,152.96. The index shed 2 percent this week, its worst week since November. Before Friday's rebound, the IPC had shed more than 4 percent from a record high in late February. Mexican stocks mounted successive all-time highs since last year as its economy grew faster than Brazil. Data on Monday is expected to show that Mexico's economy slightly picked up speed in the fourth quarter as healthy internal demand offset weaker manufacturing and construction output, according to a Reuters poll. Billionaire Carlos Slim's telecommunications firm America Movil, which accounts for one-fifth of the IPC, rose 2 percent on Friday as it bounced back from its steepest one-day slump in five years on Wednesday after posting weak earnings. Its earnings had been hurt by a foreign exchange loss of close to $400 million, but the company's chief financial officer said America Movil, Latin America's biggest phone company, has no plans to change its currency management strategy. Shares of Mexican miner Penoles shed 3.47 percent after Citigroup cut its rating to "sell" from "neutral" on the shares of Fresnillo, the precious metals miner controlled by Penoles. Citigroup recommended selling Fresnillo on concerns over waning momentum in gold and silver prices as gold prices slid to a six-month low. Chile's IPSA index fell 0.33 percent as retailer Falabella lost 1.16 percent. The index closed the week about flat. Latin America's key stock indexes at 2300 GMT: Stock indexes daily % YTD % change change Latest MSCI LatAm 3,884.59 0.23 2.29 Brazil Bovespa 57,903.30 -0.3 -5.00 Mexico IPC 44,152.96 0.63 1.02 Chile IPSA 4,594.85 -0.33 6.82 Chile IGPA 22,335.32 -0.3 6.00 Argentina MerVal 3,295.42 -0.25 15.45 Colombia IGBC 14,960.90 -0.51 1.67 Peru IGRA 21,108.10 -1.34 2.32 Venezuela IBC 597,590.1 1.42 26.76 9
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