EMERGING MARKETS-Brazil stocks drop on euro zone data, Cyprus

Thu Mar 21, 2013 12:02pm EDT

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* Euro zone PMI data worse than expected in March
    * Bovespa at lowest level since mid November
    * Brazil Bovespa falls 0.36 pct, Mexico IPC down 0.34 pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, March 21 (Reuters) - Brazilian stocks touched
their lowest intraday level of the year on Thursday as concern
over global economic growth drove down shares of banks,
steelmakers and commodities exporters. 
    Broadcaster Grupo Televisa drove losses on Mexico's IPC
index, while Chile's bourse capped a two-day
winning streak.
    Shares tracked global markets lower after Markit's Flash
Eurozone Composite Purchasing Managers' Index (PMI) showed
economic growth in the euro zone contracted more than expected
in March.
    "With the exception of the United States, which has had a
substantial economic improvement, the data has been coming in
quite poorly in other places," said Marcello Paixao, a partner
with Principia Capital Management in Sao Paulo. 
    Concerns over global economic growth tend to lead investors
away from riskier Latin American assets in favor of safe-haven
investments such as the U.S. dollar.
    Adding to investor jitters, the European Central Bank on
Thursday gave Cyprus a Monday deadline to raise billions of
euros in order to receive a critical bailout and avoid a banking
sector collapse. 
    The global risk-off attitude led to a 0.36 percent decline
in Brazil's benchmark Bovespa stock index, which has
fallen in seven of the last eight sessions.
    Shares of the most widely traded stocks, which tend to
attract a large proportion of foreign investors and often track
global risk appetite, contributed most to the Bovespa's drop.
    Shares of Vale SA fell 0.75 percent, despite data
that showed an improved economic growth outlook for China, the
iron-ore miner's biggest customer. 
    Shares of steelmaker Usinas Siderurgicas de Minas Gerais SA
, known as Usiminas, fell 2.6 percent, while Banco
Bradesco SA slipped 0.8 percent. 
    The Bovespa is currently at its lowest level since
mid-November, and has lost nearly 9 percent this year alone.
    "We have the combination of corporate earnings that are
still not very good and government mismanagement (of the
economy)," Paixao said. "Foreign investors are not very
optimistic about Brazil."
    While most analysts expect interest rates to rise in coming
months to deal with mounting inflation pressure, the Bovespa may
not suffer additional losses as a result.
    "We believe that better growth accompanied by fewer
interventionist policies will minimize the negative effects that
an interest rate rise would create among investors," JPMorgan
analyst Emy Shayo Cherman wrote in an investor note on Thursday.
    Mexico's IPC index fell for the third session in
four, losing 0.34 percent to 42,353.27.
    Broadcaster Grupo Televisa fell 1.5 percent,
contributing most to the index's losses, as Mexico's congress
prepared to vote on a sweeping reform bill for the
telecommunications sector.
    Chile's IPSA index fell for the first session in
three, dropping 0.35 percent to 4,441.74, as shares of
industrial conglomerate Copec fell 0.7 percent.
    
    Latin America's key stock indexes at 1521 GMT:
    
 Stock indexes                            daily %     YTD %
                                Latest     change    change
 MSCI LatAm                    3,768.75     -0.46      -0.3
                                                   
 Brazil Bovespa               55,830.88     -0.36     -8.40
                                                   
 Mexico IPC                   42,353.27     -0.34     -3.09
                                                   
 Chile IPSA                    4,441.74     -0.35      3.26
                                                   
 Chile IGPA                   21,751.75     -0.29      3.23
                                                   
 Argentina MerVal              3,473.12     -0.34     21.68
                                                   
 Colombia IGBC                13,943.59     -0.02     -5.25
                                                   
 Peru IGRA                    19,868.46      0.08     -3.69
                                                   
 Venezuela IBC               632,130.00         0     34.09
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