EMERGING MARKETS-Brazil stocks extend slide on rate hike bets
* Investors continue to evaluate Mantega's comments * U.S. holiday keeps trading volumes thin * Brazil Bovespa falls 0.56 pct, Mexico IPC flat By Asher Levine and Danielle Assalve SAO PAULO, Feb 18 (Reuters) - Brazilian stocks fell for the fourth straight session on Monday as investors continued to weigh policymaker signals over potential interest rate increases. Mexico's IPC index and Chile's bourse were both little-changed, with trading volume thin across the region due to a national Presidents' Day holiday in the United States. Brazil's benchmark Bovespa index extended the previous session's slide after hawkish comments by Brazil Finance Minister Guido Mantega on Friday led traders to step up bets on tighter monetary policy this year. "The market is a bit thin, with the holiday abroad, and still linked to Mantega's statements about inflation," said Henrique Kleine, chief analyst with Magliano Corretora in Sao Paulo. The Bovespa lost 0.56 percent to 57,576.39 on Monday, with options on shares set to expire. Despite the index's fall, there is no clear evidence so far that higher rates in Brazil could depress the local equity market, Bank of America Merrill Lynch analysts wrote in an investor note on Monday. The analysts, led by Felipe Hirai, said a rate-tightening cycle could potentially boost shares of banks, though they would likely weigh on shares of some companies, such as concessions firms, shopping mall operators and homebuilders. Shares of iron-ore mining firm Vale SA fell 0.77 percent, contributing most to the index's losses, while steelmaker Usinas Siderurgicas de Minas Gerais SA, known as Usiminas, dropped 3 percent. Banking shares rose, with Itaú Unibanco Holding SA , Brazil's largest non-government bank, up 0.4 percent, and rival Banco Bradesco SA rising 0.2 percent. The Bovespa is down about 5.5 percent this year, compared with a 6.5 percent gain in the S&P 500 index and a 7 percent rise in London's FTSE 100 index. Economists trimmed their forecasts for Brazil's economic growth in 2013 and 2014, a weekly central bank survey showed on Monday. "In Brazil, everyone believed that an economic recovery would occur...but in 2013 we're seeing that the situation has changed a bit," Kleine added. "The capital markets are a bit locked up due to the doubt, companies are holding back on investments...it is hard to see a rising (stock) index in this scenario." Mexico's IPC index was little-changed at 44,184.75. Retail giant Wal-Mart de Mexico lost 0.41 percent, offset by a 0.4 percent rise in shares of bottling firm Femsa Chile's IPSA index was little-changed at 4,590.67 points. A technical indicator known as the relative strength index remained near "overbought" territory however, indicating stocks may be due to fall in coming sessions. Latin America's key stock indexes at 1538 GMT: Stock indexes daily % YTD % Latest change change MSCI LatAm 3,867.45 -0.44 2.29 Brazil Bovespa 57,576.39 -0.56 -5.54 Mexico IPC 44,184.75 0.07 1.10 Chile IPSA 4,590.67 -0.09 6.73 Chile IGPA 22,324.94 -0.05 5.95 Argentina MerVal 3,260.67 -1.05 14.24 Colombia IGBC 14,955.37 -0.04 1.63 Peru IGRA 21,143.51 0.17 2.49 Venezuela IBC 608,684.50 1.86 29.11
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