EMERGING MARKETS-Latam stocks drop on U.S. debt concerns

Mon Oct 7, 2013 10:58am EDT

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* Brazil shares drop 0.37 pct on thin volumes
    * Telefonica Brasil decline after rating downgrade
    * Mexico stocks down 0.77 pct

    By Priscila Jordão and Silvio Cascione
    SAO PAULO, Oct 7 (Reuters) - Latin American stocks declined
on Monday, tracking global markets down on renewed concerns over
stalled budget talks in the United States.
    Brazil's benchmark stock index slipped 0.37 percent, near
its lowest in one month, as shares of Brazil's biggest mobile
carrier Telefonica Brasil SA dropped following a
rating downgrade. Mexico's IPC stock index fell 0.77
percent, while Chile's bourse edged 0.35 percent down.
    Trading volumes remained low in the Brazilian bourse as
investors cautiously watched the standoff between Democrats and
Republicans over the U.S. debt ceiling. 
    U.S. House Speaker John Boehner vowed on Sunday not to raise
the debt ceiling without a "serious conversation" about what is
driving the debt, while Democrats said it was irresponsible and
reckless to raise the possibility of a U.S. default.
 
    "There was a glimmer of hope for some progress in the
weekend. But that didn't happen, and as Boehner closed the doors
for now, markets are on a waiting mode," said Gustavo Mendonca,
an economist with Saga Capital in Rio de Janeiro.
    Preferred shares of Telefonica Brasil dropped 1.95 percent
to 47.26 reais after Credit Suisse analysts lowered its rating
to "neutral" from "overweight" and cut the price target to 51
reais from 59 reais. The analysts cited prospects for weak
margins and profitability in the third quarter, which would
likely reduce upside in the stock. 
    Stocks of Mexico's cement maker Cemex SAB de CV 
fell 1.34 percent to 14.72 pesos, while shares of
telecommunications firm Entel weighed on Chile's main
index by dropping 1.41 percent to 7921.200 pesos.
    
    Latin America's key stock indexes at 1435 GMT:
    
 Stock indexes                              daily %       YTD %
                               Latest        change      change
 MSCI LatAm                       3,348.66     -0.4      -11.47
                                                     
 Brazil Bovespa                  52,653.88    -0.37      -13.61
                                                     
 Mexico IPC                      40,595.50    -0.77       -7.12
                                                     
 Chile IPSA                       3,825.91    -0.35      -11.05
                                                     
 Chile IGPA                      18,827.86    -0.26      -10.64
                                                     
 Argentina MerVal                 4,912.11     1.16       72.10
                                                     
 Colombia IGBC                   14,029.02    -0.12       -4.67
                                                     
 Peru IGRA                       15,594.43     0.41      -24.41
                                                     
 Venezuela IBC                1,754,758.42      0.4      272.21
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