EMERGING MARKETS-Brazil stocks drop on China concerns, real regains ground

Mon Apr 28, 2014 2:02pm EDT

SAO PAULO, April 28 (Reuters) - Brazil's benchmark stock
index fell on Monday on concerns over weaker economic growth in
China, while Brazil's currency strengthened as investors took
advantage of its sharp drop against the dollar on Friday.
    The broader MSCI Latin American stock index 
fell about 0.5 percent, while the region's currencies were
mixed.
    Chinese state media over the weekend reported President Xi
Jinping as saying current fiscal and monetary policies would
remain essentially unchanged, dashing investor hopes for
additional short-term government stimulus in China, Brazil's top
trading partner.
    Brazil's Bovespa stock index fell for the fourth
session in five, though it held on to a nearly 1.5 percent gain
for the month.
    Shares of mining company Vale SA, which counts
China as its biggest customer, sank to their lowest intraday
level in a month as iron ore prices .IO62-CNI=SI posted their
biggest one-day decline in a week.
    Mexico's IPC stock index fell 0.35 percent as a 2
percent drop in cement maker Cemex offset a 1.5
percent gain in conglomerate Alfa.
    Chilean shares fell for a seventh straight session, weighed
down by a 1.6 percent decline in shares of conglomerate Copec
.
    In currency markets, Brazil's real staged a partial
rebound from Friday's 1.3 percent drop against the dollar. The
fall was sparked by the central bank unexpectedly declining to
hold an auction to roll over currency swaps that mature at the
beginning of May. The contracts support the real, which has
gained about 5.7 percent against the dollar this year, by
providing investors with protection against a drop in the
currency.
    "The expiry of these contracts suggests that authorities had
enough appreciation for now,"  Brown Brothers Harriman analysts
led by Marc Chandler wrote in an investor note Monday. "This is
very much in line with our long-held view that, bar a huge
external shock, USD/BRL will stay roughly within the 2.20-2.40
range at least until (Brazil's) presidential elections later in
the year."
    The Chilean peso pared early gains in afternoon
trading as the price of copper,, the country's main
export, sank.
    Colombia's peso rebounded after a four-session
decline, while Mexico's peso traded slightly weaker.
    
    Key Latin American stock indexes and currencies at 1735 GMT:

 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            992.59     -0.08     -0.93
                                                    
 MSCI LatAm                      3212.14     -0.51      0.87
                                                    
 Brazil Bovespa                 51090.07      -0.6     -0.81
                                                    
 Mexico IPC                     40052.97     -0.36     -6.26
                                                    
 Chile IPSA                      3815.61     -0.21      3.15
                                                    
 Chile IGPA                     18799.54     -0.22      3.14
                                                    
 Argentina MerVal                6653.56      1.46     23.42
                                                    
 Colombia IGBC                  13395.01     -0.11      2.48
                                                    
 Peru IGRA                      15098.81     -0.01     -4.16
                                                    
 Venezuela IBC                   2348.13      -0.4    -14.19
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2.2353      0.25      5.44
                                                    
 Mexico peso                     13.1504     -0.12     -0.92
                                                    
 Chile peso                        560.8     -0.11     -6.19
                                                    
 Colombia peso                   1936.57      0.28     -0.24
 Peru sol                          2.808     -0.21     -0.53
                                                    
 Argentina peso (interbank)       8.0000      0.03    -18.84
                                                    
 Argentina peso (parallel)         10.66      0.75     -6.19
                                                    
 

 (Editing by Peter Galloway)
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