EMERGING MARKETS-Latam stocks drop on U.S. jobs data, OGX slips

Fri Apr 5, 2013 12:29pm EDT

* U.S. payroll data weaker than expected in March
    * Brazil's OGX falls on downgrade, shorting
    * Brazil Bovespa falls 0.68 pct, Mexico IPC drops 1.14 pct

    By Asher Levine
    SAO PAULO, April 5 (Reuters) - Latin American stocks fell on
Friday after data showed U.S. employers hired at a slower than
expected pace in March, while a plunge in shares of oil firm OGX
drove Brazil's Bovespa to its lowest level in over eight months.
    Shares tracked global markets lower after data showed
employers in the United States hired at the slowest pace in nine
months in March, casting doubt over the strength of a recovery
in the world's largest economy. 
    Brazil's benchmark Bovespa stock index fell 0.68
percent to 54,274.96, its lowest level since late July.
    "The markets today are moving in sync around the world
because of the data from the U.S. and we are going along," said
Carlos Manuel Pereira, a strategist with brokerage Lopes Filho e
Associados in Rio de Janeiro.
    Shares of oil producer OGX Petroleo e Gas Participacoes SA
 sank to their lowest intraday price since their
market debut in 2008, two days after Standard & Poor's lowered
its credit rating on the company to "B minus" from "B" citing
concerns over production levels. 
   Shares of OGX, controlled by billionaire Eike Batista, fell
11 percent, adding to a nearly 11 percent drop in the previous
session.
    The number of short positions on OGX shares has nearly
tripled since September, with analysts citing the potential for
share dilution should Batista need to bolster the troubled
company's capital position.
    Traders who sell securities "short" borrow shares and then
sell them in the hope that the price will fall, so they can buy
them back more cheaply, return them to the lender and pocket the
difference.
    Many investors have also sold shares in recent days to stem
losses in the stock, which is down 60 percent this year alone.
    "Investors are reviewing their calculations, seeing that
what they expected for the stock isn't going to materialize, and
running out. It's a herd mentality," added Pereira.
    Mexico's IPC index fell its most in over two weeks,
dropping 1.14 percent to 43,068.17 and slipping below a key
support level at its 100-day simple moving average.
    The weak U.S. jobs data weighed heavily on Mexico's stock
market, as the United States is Mexico's No. 1 trade partner and
Mexico's stocks often rise or fall based on the outlook for
economic growth in its northern neighbor.
    Shares of retail giant Wal-Mart de Mexico 
slipped 2 percent, contributing most to the index's decline,
while shares of telecommunications firm America Movil,
controlled by billionaire Carlos Slim, dropped 1.2 percent.
    Mexico's competition watchdog said late Thursday that
America Movil unit Telcel dominates the country's phone market,
opening the door to tougher regulation of the firm.
 
    Chile's IPSA index retreated for the fifth straight
session, losing 0.9 percent to 4,288.22 as shares of retailer
Falabella fell 1 percent.
    A technical indicator known as the relative strength index
crossed into "oversold" territory however, indicating stocks may
be due to rebound in coming sessions.

    Latin America's key stock indexes at 1553 GMT:
    
 Stock indexes                            daily %     YTD %
                                Latest     change    change
 MSCI LatAm                    3,736.10      0.06     -1.69
                                                   
 Brazil Bovespa               54,274.96     -0.68    -10.95
                                                   
 Mexico IPC                   43,068.17     -1.14     -1.46
                                                   
 Chile IPSA                    4,288.22      -0.9     -0.31
                                                   
 Chile IGPA                   21,113.43     -0.72      0.20
                                                   
 Argentina MerVal              3,303.23      0.18     15.73
                                                   
 Colombia IGBC                13,683.92     -0.88     -7.01
                                                   
 Peru IGRA                    19,624.27      0.08     -4.87
                                                   
 Venezuela IBC               633,887.75      0.18     34.46
FILED UNDER: