EMERGING MARKETS-Latam stocks slip on Cyprus bailout concerns

Mon Mar 18, 2013 11:52am EDT

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* Cyprus bailout plan spooks investors
    * Commodities shares drive losses in Brazil
    * Brazil Bovespa falls 0.28 pct, Chile IPSA down 0.27 pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, March 18 (Reuters) - Latin American stocks fell
on Monday after a bailout plan for Cyprus rattled global markets
and led to a sell-off for riskier assets. 
    Brazilian stocks were choppy as options on stocks were set
to expire later in the day. Chile's IPSA index retreated
for the sixth straight session. Mexico's IPC index was
closed for a local holiday.
    The MSCI Latin American stock index fell to
a two-week low, losing 0.62 percent to 3,803.68.
    Shares tracked global markets lower after euro zone leaders
struck a deal that would force bank depositors in Cyprus to help
fund the cost of their country's bailout. Investors feared the
decision could spark wide outflows of bank deposits across the
euro zone's periphery and reignite concerns over the euro zone
debt crisis. 
    "It is a drastic measure ... and it is something that could
reappear in other circumstances," said Jose Francisco Goncalves,
chief economist with Banco Fator in Sao Paulo. "People in Greece
or Italy, for example, may think 'What's to say if it happens
there it can't happen here?'"
    Brazil's benchmark Bovespa stock index dropped for
the fifth straight session, losing 0.28 percent to 56,709.12.
    Shares of the most widely traded commodities firms
contributed most to the index's decline, with iron-ore miner
Vale SA down 1.2 percent and oil producer OGX
Petroleo e Gas Participacoes SA slipping 2.4 percent.
    Local stocks with high liquidity tend to attract foreign
investors looking for exposure to Latin American equities, and
their performance often tracks global risk appetite.
    The Bovespa index is down 7 percent this year, compared to a
2.5 percent drop in Mexico's IPC and a nearly 9 percent rise in
the S&P 500 index.
    "Our market continues to suffer," said Pedro Galdi, chief
strategist with SLW Corretora in Sao Paulo. "Investors are
afraid of government intervention and high inflation, which is
generating uncertainty."
    Chile's IPSA index fell 0.27 percent to 4,397.58,
although a technical indicator known as the relative strength
index neared "oversold" territory, indicating stocks may be due
to rebound in coming sessions.
    Data on Monday showed Chile's economic growth sped up in the
last quarter of 2012, and the economy is forecast to post strong
growth again this year. 
    
    Latin America's key stock indexes at 1452 GMT:
    
 Stock indexes                            daily %     YTD %
                                Latest     change    change
 MSCI LatAm                    3,803.68     -0.62      0.78
                                                   
 Brazil Bovespa               56,709.12     -0.28     -6.96
                                                   
 Mexico IPC                   42,605.05     -1.72     -2.52
                                                   
 Chile IPSA                    4,397.58     -0.27      2.24
                                                   
 Chile IGPA                   21,591.82      -0.2      2.48
                                                   
 Argentina MerVal              3,466.80     -0.62     21.46
                                                   
 Colombia IGBC                14,256.08     -0.84     -3.12
                                                   
 Peru IGRA                    20,221.06      0.12     -1.98
                                                   
 Venezuela IBC               629,322.13         0     33.49
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