EMERGING MARKETS-Brazil stocks choppy on concerns about rates

Thu Mar 14, 2013 5:50pm EDT

Related Topics

* Central bank signals rate hike may not be imminent
    * America Movil rebounds after three-day slide
    * Brazil Bovespa loses 0.18 pct, Mexico IPC up 0.16 pct

    By Danielle Assalve
    SAO PAULO, March 14 (Reuters) - Brazilian stocks slipped on
Thursday even as Wall Street rose again to record highs, as
investors sought clues in the central bank's most recent policy
minutes about whether it was likely to hike interest rates soon
from current record lows.
    Mexico's IPC index snapped a three-day slide
following encouraging economic data in the United States and a
reverse of fortunes for Carlos Slim's beleaguered telecoms giant
America Movil, while Chile's IPSA index dropped for
the fourth straight day.
    Brazil's central bank signaled it would remain cautious over
its next policy steps but did not offer a clear indication about
whether it would hike interest rates at its next monetary
committee meeting.
    Higher rates tend to lead investors away from stocks towards
fixed-income assets. 
    Wall Street continued its rally, taking the Dow Jones
industrial average higher for its 10th straight day, with
the benchmark index ending at another record high as data showed
the U.S.  labor market's recovery was improving. 
    But Brazil's Bovespa dipped 0.18 percent to
57,281.02 points, slipping into the red for the third straight
session. 
    "It is undeniable that Brazil has lost its luster," said
Paulo Veiga, research director at Mercatto Resource Management
in Rio de Janeiro, saying government interventions in the
private sector and uncertainty over the outlook for the economy
have investors leery of the local market.
    "In a country that was under the spotlight two years ago, we
are today in a very bad position compared to other emerging
markets."
    Homebuilder MRV Engenharia dropped 6.33 percent,
contributing most to the index's declines, while Ita├║ Unibanco
Holding SA, Brazil's largest non-government bank, was
off 1.52 percent.
    Banks usually benefit from higher interest rates because
they gain more from holding interest-rate-linked government debt
and face less government pressure to reduce lending spreads.
Homebuilders tend to suffer when rates rise, making mortgage
loans more expensive.
    Analysts said the fact that both sectors performed poorly on
Thursday could mean the market remained undecided on the outlook
for monetary policy in the near term.
    Shares of OGX Petroleo e Gas Participacoes SA,
the oil company controlled by Brazilian billionaire Eike
Batista, gained 0.84 percent after the stock closed at a record
low on Wednesday.
    Mexico's IPC index rose 0.16 percent to 43,348.52.
Shares were boosted by better-than-expected unemployment claims
and retail sales data in the United States, which suggested the
economy of Mexico's top trading partner is expanding more
rapidly. 
    Shares of telecommunications firm America Movil,
controlled by billionaire Carlos Slim, contributed most to the
index's rise, adding 2.45 percent. 
    The shares had tumbled 13 percent over the previous three
sessions after Mexico's government proposed reforms on Monday
that would overhaul the sector in a bid to spark competition.
    Chile's IPSA index fell 0.68 percent to 4,449.78 as
shares of LATAM Airlines Group dropped 1.39 percent.
    Latin America's key stock indexes at 2117 GMT:
    
 Stock indexes                                      % change
                              Latest              
                                                            
 MSCI LatAm                          3,861.97           -0.1
                                                  
 Brazil Bovespa                     57,281.02          -0.18
                                                  
 Mexico IPC                         43,348.52           0.16
                                                  
 Chile IPSA                          4,449.78          -0.68
                                                  
 Chile IGPA                         21,807.82          -0.55
                                                  
 Argentina MerVal                    3,499.25           1.09
                                                  
 Colombia IGBC                      14,289.63          -0.54
                                                  
 Peru IGRA                          19,796.84              0
                                                  
 Venezuela IBC                     629,322.13          -0.62
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