EMERGING MARKETS-Latam stocks drop in reaction to Italy deadlock

Tue Feb 26, 2013 1:21pm EST

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* Brazil's Bovespa heads back toward 3-month low
    * Mexican stocks trade at lowest since December
    * Bovespa down 0.78 pct, Mexico IPC off 0.17 pct

    By Anthony Esposito and Michael O'Boyle
    SANTIAGO/MEXICO CITY, Feb 26 (Reuters) - Latin America's
major stock bourses fell on Tuesday, as the rise of a comedian's
protest party in elections in Italy and ensuing political
deadlock was seen as no laughing matter by spooked investors.
    Brazil's benchmark Bovespa stock index traded 0.78
percent lower at 56,174 in afternoon trade, falling for the
second session in a row and nearing a recent three-month low.
    The election in Italy, the third largest economy in the euro
zone, saw a dramatic surge of the anti-establishment 5-Star
Movement of comic Beppe Grillo. It left none of the political
parties a parliamentary majority, posing the threat of prolonged
instability and European financial crisis. 
    "The whole world is feeling the repercussions of the Italian
election," said Douglas Pinto, a broker with BGC Liquidez in Sao
Paulo.
    Heavily weighted Petrobras' preferred shares slid
1.95 percent after BTG Pactual investment bank late on Monday
cut their recommendation for the stock to neutral due to the
limited impact of the recent increase in Brazilian fuel
prices. 
    "When BTG speaks, the market respects its opinion ...
Petrobras' shares have some problems of their own too, as some
foreign investors aren't very happy with the company and are
selling," said Pinto. 
    Mexico's IPC stocks index lost 0.17 percent to 43,421
as it traded at its lowest levels since December.
    The IPC has shed more than 5 percent from a record high in
January, hurt by weaker-than-expected earnings and concerns that
U.S. lawmakers could fail to avert spending cuts that could slow
the economy of the United States, Mexico's top trading partner.
    Shares in broadcaster Grupo Televisa fell more
than 1 percent after the company said in a conference call that
it would not offer a special dividend this year. Late Monday,
Televisa reported a higher fourth-quarter profit on solid sales
and lower financing costs. 
    Copper miner and railroad operator Grupo Mexico
 shed 1 percent. Airport operator GAP said on
Tuesday it will appeal a court's decision that ruled certain of
its by-laws invalid. Grupo Mexico has sued the airport operator,
demanding it change the rules and Grupo Mexico has launched an
offer to acquire more GAP shares. 
    Chile's IPSA index declined for the second straight
session, losing 0.63 percent to 4,487 as energy company Enersis
 fell 1.64 percent.
     
 Stock indexes                      daily %    YTD %
                                     change   change
                         Latest              
 MSCI LatAm               3,741.66    -1.51     0.03
                                             
 Brazil Bovespa          56,173.73    -0.78    -7.84
                                             
 Mexico IPC              43,421.54    -0.17    -0.65
                                             
 Chile IPSA               4,487.44    -0.63     4.33
                                             
 Chile IGPA              21,935.87    -0.49     4.11
                                             
 Argentina MerVal         3,075.60    -1.56     7.75
                                             
 Colombia IGBC           14,721.63    -0.72     0.04
                                             
 Peru IGRA               20,712.65     0.73     0.40
                                             
 Venezuela IBC           617,176.6    -0.89    30.91
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