EMERGING MARKETS-Brazil's revamped Bovespa index falls on weak data

Mon Jan 6, 2014 10:49am EST

* Brazil Bovespa falls 0.7 pct, Mexico IPC down 0.2 pct

    SAO PAULO, Jan 6 (Reuters) - Brazilian stocks fell on
Monday, the first day of trading on the newly-adjusted benchmark
Bovespa index, after weak economic data from Brazil and
its top trading partner China.
    Shares of iron ore miner Vale SA, which counts
China as one of its main customers, were down 0.86 percent while
shares of state-run oil firm Petroleo Brasileiro SA 
lost 0.3 percent.
    Vale contributed the most to the Bovespa's 0.7 percent fall.
    Brazil's bourse regularly updates the Bovespa index to
better reflect changes in trading volumes of the stocks it
tracks, among others. Investors asked for modifications to the
Bovespa index last year because they believed it over weighted
stocks tied to commodities exporters and especially to companies
in tycoon Eike Batista's crumbling energy and logistics empire.
    The Bovespa was one of the world's worst-performing indexes
in 2013, dragged down by Batista's flagship energy firm Oleo e
Gas SA, previously known as OGX, which lost more than 90 percent
of its value before being removed from the index.
    Batista's mining conglomerate MMX Mineracao e Metalicos SA
 was removed from the Bovespa on Monday and fell 14
percent as investors eliminated it from their portfolios to
reflect the change.
    "There is still some adjusting to the new Bovespa portfolio,
and the blue-chips are falling, pushing the index down," said
Alvaro Bandeira, a partner at Orama Investimentos in Rio de
Janeiro.
    Data showing any signs of a slowdown in China, Brazil's top
trading partner, frequently affects top-traded commodities
stocks. On Monday data showed growth in China's services sector
slowed sharply in December to its lowest point since August
2011. 
    HSBC's Composite Output Index for Brazil, which
includes manufacturing activity, also fell to 51.7 in December
from 51.8 in November, though it remained in positive territory
for the fourth straight month. 
    "All the PMIs released showed not a contraction, but
definitely a slowdown," Bandeira said.
    Stocks that were added to Bovespa index on Monday also
largely fell in their index debut.
    Electricity firm Tractebel Energia SA was down
1.48 percent and Insurance holding company BB Seguridade
Participações SA fell 1.07 percent.
    Education firm Estácio Participações SA shed 1.63
percent, homebuilder Even Construtora e Incorporadora SA
 was down 0.38 percent and toll road operator
Ecorodovias Infraestrutura e Logistica SA dropped
2.18 percent. 
    Health benefits administrator Qualicorp SA rose
1.7 percent, however.
    Braskem, Latin America's largest petrochemical
company, fell 1.65 percent. Argentina's stock regulator on
Friday rejected Braskem's offer to buy the roughly 30 percent of
the shares of plastic maker Solvay Indupa that are publicly
traded.  
    Shares of telecommunications firm TIM Participações SA
, fell 0.82 percent after Spain's Telefonica 
denied rumors it was readying a takeover offer. 
    Those reports had sent the stock soaring the most in three
months on Friday. 
    Mexico's IPC index fell 0.18 percent while Chile's
bourse was little changed in early trading.
        
    Latin America's key stock indexes at 1456 GMT: 
        
 Stock indexes               Latest        daily %    YTD %
                                           change     change
 MSCI LatAm                  3,117.31      -0.49      -2.13
                                                      
 Brazil Bovespa              50,623.99     -0.7       -1.71
                                                      
 Mexico IPC                  41,991.19     -0.18      -1.72
                                                      
 Chile IPSA                  3,697.81      -0.02      -0.04
                                                      
 Chile IGPA                  18,231.90     -0.01      0.03
                                                      
 Argentina MerVal            5,401.32      0.35       0.19
                                                      
 Colombia IGBC               0.00          100.00     -100.00
                                                      
 Peru IGRA                   15,889.46     0.07       0.86
FILED UNDER: