Brazil stocks choppy on profit-taking, real weaker

SAO PAULO, Nov 12 (Reuters) - Brazilian stocks seesawed in early trading on Thursday, as investors cashed in on recent gains made on the back of ongoing investor interest for Brazilian assets.

The benchmark Bovespa index .BVSP dipped 0.21 percent to 66,289.26 in morning trading despite a brief foray into positive territory. The index has gained over the past three sessions.

Brazil's currency, the real (BRBY), weakened 0.17 percent to 1.725 per dollar as the greenback strengthened against a basket of major currencies .DXY.

"It's a round of profit-taking," said Ernesto Leme, a partner at Claritas Wealth Management.

But whether the index's fall would last to the end of the day was harder to predict, he said. The index slid much of Tuesday and Wednesday as well, but ultimately rallied late in those days and squeaked out gains.

"There's still a lot of interest from foreign investors," he said.

Commodities were also lower, pressured by the stronger dollar, with the 19-commodity Reuters-Jefferies index .CRB slipping 0.44 percent.

The Bovespa index includes a number of companies tied to the trade of raw materials, and the decline in commodities hurt mining company Vale and some Brazilian steelmakers, which were falling early on Thursday.

Vale (VALE5.SA), the world's largest iron ore producer, led losses, moving down 0.73 percent to 42.02 reais.

Among steelmakers, Gerdau (GGBR4.SA) lost 1.16 percent to 28.12 reais.

In contrast, Banco do Brasil (BBAS3.SA), Latin America's largest bank by assets, rose 1.64 percent to 31.63 reais.

The bank posted a smaller drop than expected in the third quarter and expects loan portfolio growth to continue outperforming the market average, Chief Executive Aldemir Bendine said on Thursday. [ID:nSPG002585]

State-controlled energy company Petrobras (PETR4.SA), the most heavily-weighted stock in the index, traded nearly flat, dipping 0.05 percent to 37.58 reais.

Airline TAM (TAMM4.SA) saw choppy trading, slipping 0.81 percent to 28.19 near mid-day after having gained in the morning. The company plans to hike domestic airfares about 10 percent at the start of 2010. [ID:nN12408500]

Rival airline Gol (GOLL4.SA) climbed 0.63 percent to 20.69 reais.

Yields on Brazilian interest rate futures contracts <0#DIJ:> broadly edged higher.

The yield on the contract due January 2011 DIJF1 inched to 10.22 percent from 10.16 percent. The yield on the contract due July 2011 DIJN1 ticked to 11.14 percent from 11.06 percent.

Both were among the morning's most highly-traded contracts.

Investors use the contracts to bet on trends in the country's benchmark interest rate, the Selic, currently at a record-low 8.75 percent.

(Reporting by Luciana Lopez, Editing by Chizu Nomiyama)