EMERGING MARKETS-Chilean stocks down on foreign sales; Petrobras reverses gains

Tue May 20, 2014 4:28pm EDT

(Updates prices, explains Petrobras reversal)
    By Asher Levine and Anthony Esposito
    SAO PAULO/SANTIAGO, May 20 (Reuters) - Chilean stocks
dropped on Tuesday as weak earnings spurred  foreigners to sell
shares in a low-volume session, while Brazil's stock index fell
as Petrobras shares reversed early gains.
    The broader MSCI Latin American stock index 
posted its biggest loss in over a month.
    Chile's blue-chip IPSA index slid 1.2 percent, with
commodities-linked companies falling hardest in the world's top
copper producer.
    Shares in CAP dropped after the iron-ore and steel
producer posted disappointing results late Monday night, while
heavy-weight Empresas Copec, Chile's largest industrial
conglomerate, sank on expectations it will post weak earnings
later this week, a trader said.
    The Chilean peso weakened its most in nearly a month
as the price for copper, the country's main export, sank
the most in nearly two weeks. 
    Chile's market will be closed on Wednesday for the Navy Day
holiday. Dollar demand tends to rise the day before market
holidays as traders look to close positions, analysts said.  
    Elsewhere in the region, Brazil's Bovespa stock index
 slipped its most since mid-April as preferred shares of
state-controlled oil firm Petroleo Brasileiro SA,
known as Petrobras, reversed early gains.
    Petrobras shares rose early in the day when investors upped
their bets on the stock in anticipation of a closely watched
electoral poll due Thursday. Recent polls showing a decline in
President Dilma Rousseff's approval rating ahead of October's
election have driven big gains in the stock as shareholders hold
out hope for a more market-friendly administration.
    The shares dropped abruptly in late afternoon trading after
a local news website said Rousseff was unlikely to lose support
in the poll.
    Mexican stocks were little-changed as a decline in lender
Grupo Financiero Banorte offset bargain-hunting
for shares of telecommunications firm America Movil a
day after the stock slid 4 percent.
    In currency markets, Brazil's real and Mexico's peso
 both weakened slightly against the dollar, as political
unrest in Thailand and concern over Chinese economic growth led
to a decline in global risk appetite.
    The Colombian peso weakened 0.16 percent to 1,921.
Colombia's President Juan Manuel Santos said on Tuesday it would
be reasonable for the currency to weaken to between 2,000 and
2,200 pesos per dollar as a result of government intervention
and dollar-buying by the central bank. 
     
    Key Latin American stock indexes and currencies at 2009 GMT:
    
 Stock                        Latest    daily %   YTD %
   indexes                              change    change
 MSCI Emerging Markets        1030.03   -0.52     3.27
                                                  
 MSCI LatAm                   3314.14   -1.47     5.08
                                                  
 Brazil Bovespa               52427.06  -1.74     1.79
 Mexico IPC                   41805.1   -0.08     -2.16
 Chile IPSA                   3888.16   -1.2      5.11
 Chile IGPA                   19058.49  -1.02     4.56
 Argentina MerVal             7204.33   0.67      33.64
 Colombia IGBC                13473.18  -1.22     3.07
 Peru IGRA                    15676.32  0.03      -0.49
 Venezuela IBC                2189.78   2.03      -19.98
                                                  
 Currencies                   Latest    daily %   YTD %
                                        change    change
 Brazil real                  2.2162    -0.37     6.34
 Mexico peso                  12.9132   -0.06     0.90
 Chile peso                   552.8     -0.90     -4.83
 Colombia peso                1921.02   -0.16     0.57
                                                  
 Peru sol                     2.789     -0.04     0.14
 Argentina peso (interbank)   8.0600    -0.03     -19.45
                                                  
 Argentina peso (parallel)    11.72     -3.50     -14.68
                                                  
 
 (Editing by Chizu Nomiyama and Chris Reese)
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