Brazil's real weakens on outflows, stocks firm

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SAO PAULO, Dec 4 (Reuters) - Brazil's stock market edged up in cautious trade on Tuesday, but the country's currency weakened as concerns grew that a credit crunch in the United States would reduce capital flows to emerging markets.

The Bovespa index .BVSP of the Sao Paulo Stock Exchange rose 0.45 percent to 63,481.5 points in its sixth straight session of gains. The index rallied more than 7 percent over the period.

The Brazilian real (BRBY) weakened over 0.8 percent to 1.809 per U.S. dollar, paring losses after being down as much as 2 percent earlier in the session.

The country has seen a steady outflow of capital recently from companies that are buying dollars to send remittances of dividends and profits abroad, a common practice at the end of the year.

Tighter credit markets in the United States and Europe may reduce capital flows to Brazil, putting additional pressure on the exchange rate.

"The market expects a strong reduction in available credit toward the end of the year," said Vanderlei Arruda, manager of currency trading at the Souza Barros brokerage.

Interest-rate futures <0#DIJ:> on the Brazilian commodities and futures bourse BM&F rose as investors' aversion to risky assets grew.

On the stock market, ArcelorMittal Inox Brasil ACES4.SA soared 9.37 percent to 97.49 reais after parent company ArcelorMittal said on Tuesday it plans to buy all outstanding shares in the Brazilian subsidiary for up to 3.2 billion reais. ArcelorMittal said it would offer 100 reais per common or preferred shares in the unit, previously known as Acesita.

Aircraft maker Embraer (EMBR3.SA) rose 3.25 percent to 20.35 reais. Credit Suisse said in a report Embraer's $746 million order with U.S.-based Flight Options for 100 executive jets is a "very positive development ... that shows the high acceptance" of the planes.

State-controlled oil company Petrobras (PETR4.SA) rose 1.78 percent to 74.5 reais, even as crude prices retreated in international markets. (Reporting by Silvio Cascione and Elzio Barreto; Editing by James Dalgleish)