* U.S. lawmakers return to budget discussions
* Petrobras weighs on Brazil's Bovespa
* Bovespa falls 0.89 pct, Mexico's IPC flat
By Asher Levine
SAO PAULO, Dec 27 Brazil's Bovespa stock index
fell on Thursday as investors remained cautious over U.S. budget
negotiations, while low holiday trading volumes contributed to
State-controlled oil company Petrobras weighed on
Brazil's benchmark Bovespa index, while gains for
Mexican financial companies failed to significantly lift the IPC
, which ended the day flat.
Risk appetite was limited as U.S. President Barack Obama
returned to Washington on Thursday morning to try to revive
negotiations to avert the "fiscal cliff" of automatic tax hikes
and spending cuts that could throw the U.S. economy into
Concerns among traders mounted later on Thursday after U.S.
Senate Majority Leader Harry Reid said, in a speech on the
Senate floor, that the U.S. economy is poised to go over the
"The market is still undefined due to the United States, so
many investors are choosing to be a bit more defensive in the
last sessions of the year," said Joao Pedro Brugger, an analyst
with Leme Investimentos in Florianopolis, Brazil.
Brugger said low trading volume due to year-end holidays
contributed to greater-than-usual volatility.
Brazil's Bovespa whipsawed throughout the day before ending
down 0.89 percent at 60,415.95 points.
Shares of oil giant Petroleo Brasileiro SA, known as
Petrobras, slipped 3.24 percent and ranked as the biggest
contributor to the index's losses.
Brugger said investors' jitters over the company's future
revenue stream are preventing the stock from advancing further,
despite government pledges to increase fuel prices next year.
Mexico's IPC index dipped 0.06 percent to 43,469.89.
Lender Grupo Financiero Banorte rose 0.4
percent, while shares of conglomerate Alfa added 0.81
percent, driving gains.
Chile's bourse fell slightly, losing 0.15 percent to
Latin America's key stock indexes at 1532 GMT:
Stock indexes % change
MSCI LatAm 3,782.91 -0.23
Brazil Bovespa 60,415.95 -0.89
Mexico IPC 43,469.89 -0.06
Chile IPSA 4,294.50 -0.15
Chile IGPA 21,027.51 -0.06
Argentina MerVal 2,839.14 0.39
Colombia IGBC 14,709.30 0.83
Peru IGRA 20,377.63 0.11
Venezuela IBC 467,732.75 0.5