EMERGING MARKETS-Profit-taking hits Latam; Brazil off after data

Wed Apr 9, 2014 12:17pm EDT

RIO DE JANEIRO, April 9 (Reuters) - Latin American markets
dropped on Wednesday as investors pocketed recent gains, while
Brazilian stocks were further pressured by higher-than-expected
inflation data.
    MSCI's benchmark index for Latin American stocks
 retreated 1.1 percent in a second consecutive
down session. It gained about 15 percent from mid-March through
Monday as risk appetite increased globally.
    Investors adopted a cautious tone ahead of the release of
minutes of the U.S. Federal Reserve's latest monetary policy
meeting. The document, due at 1600 GMT, could offer hints about
the timing of an expected interest rate hike by the U.S. central
bank, following mixed signals from several Fed speakers.
 
    Brazil's Bovespa index fell 1.1 percent after the
country's IPCA consumer inflation index in March hit its fastest
pace in 11 years for that month, suggesting the central bank may
need to keep raising interest rates for a little longer.
 
    "Higher inflation shows that the macroeconomic scenario
remains very challenging and that all the excitement we've
recently seen in the stock market may have had technical
reasons," said Joao Pedro Brugger, an equities analyst with Leme
Investimentos, a brokerage in Florianopolis, Brazil.
    "The recent performance of the Bovespa index appears a
little exaggerated as the economic fundamentals have not
changed," he added.
    The Bovespa has gained more than 15 percent in the past
three weeks as investors snatched stocks considered cheap on
hopes that Brazil's next president would curb public spending to
fight inflation and reduce government intervention in the
economy. 
    Although President Dilma Rousseff remained on track to win
re-election on Oct. 5, investors believed she could be forced to
change her policies in a second term as Brazilians grow
increasingly worried about inflation.
    In foreign exchange markets, the Brazilian real  
weakened 0.4 percent after the currency pushed past the 2.2 per
dollar mark for the first time since October during three
straight winning sessions.
    "I don't believe the real has the strength to gain further.
It seems that 2.2 per dollar is a very important resistance
level," said Mario Battistel, a manager at the currency desk of
Fair brokerage in Sao Paulo.
    Chile's peso slid 0.75 percent, leading losses among
Latin American currencies, as the price of copper, the
country's main export product, fell about 1 percent.
    (GRAPHICS:
    Emerging market FX 2014 performance: link.reuters.com/jus35t
    MSCI emerging index 2014 performance: link.reuters.com/weh36s)
    
    Key Latin American stock indexes and currencies at 1555 GMT:
    
     Stock indexes                    daily %    YTD %
                      Latest          change     change
 MSCI Emerging        1014.24         0.27       0.88
 Markets                                         
 MSCI LatAm           3255.92         -1.27      3.03
                                                 
 Brazil Bovespa       51064.54        -1.09      -0.86
                                                 
 Mexico IPC           40865.33        -0.1       -4.36
                                                 
 Chile IPSA           3843.93         0.57       3.91
                                                 
 Chile IGPA           18843.16        0.47       3.38
                                                 
 Argentina MerVal     6440.5          -0.72      19.47
                                                 
 Colombia IGBC        13747.15        -0.45      5.17
                                                 
 Peru IGRA            14467.31        -0.2       -8.17
                                                 
 Venezuela IBC        2524.09         0.03       -7.76
                                                 
                                                 
 Currencies                           daily %    YTD %
                            Latest    change     change
 Brazil real          2.2162          -0.64      6.34
                                                 
 Mexico peso          13.0478         -0.02      -0.14
                                                 
 Chile peso           549.4           -0.76      -4.24
                                                 
 Colombia peso        1932.64         0.00       -0.03
                                                 
 Peru sol             2.796           0.43       -0.11
                                                 
 Argentina peso       8.0000          0.03       -18.84
 (interbank)                                     
                                                 
 Argentina peso       10.24           0.98       -2.34
 (parallel)                                      
                                                 
 
 (Reporting by Walter Brandimarte, Priscila Jordao and Bruno
Federowski; Editing by Jeffrey Benkoe)