EMERGING MARKETS-Brazil stocks fall to 9-month low as rate hikes eyed
* Volume jumps as Bovespa falls to key support * Brazil seen starting interest rate hike cycle * Brazil Bovespa falls 2.05 pct, Mexico IPC down 1.42 pct MEXICO CITY, April 17 (Reuters) - Brazilian stocks dropped to their lowest level in nearly nine months on Wednesday, hurt by expectations the country's central bank would start raising interest rates while the economy is still on shaky ground. Concerns over global economic growth also drove down shares in Brazil's commodities exporters, while Mexican stocks hit an almost one-month low. Brazil's Bovespa index shed 2.05 percent to 52,881.96, its lowest close since late last July, on heavy volume. The index bounced off a key support level in intraday trade around 52,500. A drop of more than 1 percent in the coming session would take prices to their lowest in 18 months. A break lower on heavy volume could point to a further slump, or bargain hunters might jump in after the Bovespa tumbled more than 13 percent this year. Brazil's central bank was expected to raise its benchmark interest rate from a record low of 7.25 percent later on Wednesday as high inflation threatens to sabotage a weak recovery in Latin America's largest economy. "If the bank starts raising rates today, it will negatively affect homebuilders and the consumption sector and could possibly help banks," said Luis Gustavo Pereira, a strategist with Futura Corretora in Sao Paulo. Pereira added that investors will monitor the expiration of options on index futures, due at the end of the session. "Foreign investors are very short on the index. If we see a lot of them rolling over their positions, it could mean more downward pressure on the index going forward," he said. Homebuilder PDG Realty shed 5.4 percent while its rival Gafisa SA lost nearly 6 percent. Further hurting sentiment, the International Monetary Fund on Tuesday trimmed projections for global growth for this year and next, adding to investor jitters caused by weaker-than-expected Chinese growth data on Monday. State-run oil company Petroleo Brasileiro SA, known as Petrobras, shed 2.99 percent. Shares of oil company OGX Petroleo e Gas Participacoes SA dropped 10.71 percent after the company, which has struggled to meet production targets, said on Tuesday that output at its offshore oil wells fell in March. Mexico's IPC index fell for the third session in four, losing 1.42 percent to 42,610.91, its lowest since March 12. Shares of mining firm Grupo Mexico lost 5.08 percent to their lowest price since early December. Mexican stocks began April by climbing back toward a record high seen in January. The IPC stock index has now fallen 4 percent in the last four sessions and is trading just above its 200-day simple moving average, where it found support during a sell-off in March. Chile's IPSA index fell 0.41 percent as shares of retailer Falabella lost 0.78 percent. The IPSA recently rebounded off its lowest since last December. Latin America's key stock indexes at 2200 GMT: Stock indexes daily YTD % Latest % change change MSCI LatAm 3,659.92 -1.81 -3.63 Brazil Bovespa 52,881.96 -2.05 -13.24 Mexico IPC 42,610.91 -1.42 -2.51 Chile IPSA 4,243.43 -0.41 -1.35 Chile IGPA 20,878.62 -0.44 -0.91 Argentina MerVal 3,425.03 -1.39 20.00 Colombia IGBC 13,296.38 -0.68 -9.65 Peru IGRA 17,915.72 -3.09 -13.15 Venezuela IBC 641,807.81 0 36.14
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