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EMERGING MARKETS-Brazil stocks choppy on concerns about rates
March 14, 2013 / 5:05 PM / 5 years ago

EMERGING MARKETS-Brazil stocks choppy on concerns about rates

* Central bank signals rate hike may not be imminent
    * America Movil rebounds after three-day slide
    * Brazil Bovespa loses 0.27 pct, Mexico IPC up 0.73 pct

    By Asher Levine
    SAO PAULO, March 14 (Reuters) - Brazilian stocks slipped on
Thursday in volatile trading, as investors looked for clues
about an interest rate hike in the central bank's most recent
policy minutes.
    Mexico's IPC index snapped a three-day slide
following encouraging economic data in the United States, while
Chile's IPSA index dropped for the fourth straight day.
    Brazil's central bank on Thursday signaled it would remain
cautious over its next policy steps, though stopped short of
offering a clear indication that it would hike interest rates
from current record lows at its next monetary committee meeting.
    Higher rates tend to lead investors away from stocks towards
fixed income assets. 
    "The (monetary policy) committee signaled that it is still
not set on raising rates in the short term," said Daniel Cunha,
an economist with XP Investimentos in Sao Paulo. "The economic
balance in Brazil is still very nebulous and that creates doubt,
which could prevent Brazil from showing up on foreign investors'
radars."
    Brazil's benchmark Bovespa stock index fell for the
third straight session, slipping 0.27 percent to 57,231.62 after
spending most of the morning in positive territory.
    Homebuilder MRV Engenharia dropped 5.5 percent,
contributing most to the index's declines, while Itaú Unibanco
Holding SA, Brazil's largest non-government bank, was
off 1.4 percent.
    Banks usually benefit from higher interest rates because
they gain more from holding interest-rate-linked government debt
and face less government pressure to reduce lending spreads.
Homebuilders tend to suffer when rates rise and make mortgage
loans more expensive.
    Analysts said the fact that both sectors performed poorly on
Thursday could mean the market is still undecided on the outlook
for monetary policy in the short term.
    "The market was very apprehensive about the central bank's
interest rate policy," said Henrique Kleine, chief analyst with
Magliano Corretora in Sao Paulo. "There are various
interpretations ... the minutes were seen by some to mean the
government won't touch rates in the short term."
    Shares of OGX Petroleo e Gas Participacoes SA,
the oil company controlled by Brazilian billionaire Eike
Batista, gained 3 percent after the stock closed at a record low
on Wednesday.
    Bargain-hunting drove gains in the shares following a drop
of more than 23 percent over the previous three sessions that
was sparked by weak offshore production results on Monday, said
Guilherme Sand, a partner with Zenith Asset Management in Porto
Alegre, Brazil.
    Mexico's IPC index rose 0.73 percent to 43,594.36
after finding technical support at its 100-day simple moving
average. Shares were boosted by better-than-expected
unemployment claims and retail sales data in the United States,
which suggested the economy of Mexico's top trading partner is
expanding more rapidly. 
    Shares of telecommunications firm America Movil,
controlled by billionaire Carlos Slim, contributed most to the
index's rise, adding 4.2 percent. 
    The shares had tumbled 13 percent over the previous three
sessions after Mexico's government proposed reforms on Monday
that would overhaul the sector in a bid to spark competition.
    Chile's IPSA index fell 0.38 percent to 4,463.18 as
shares of LATAM Airlines Group dropped 1 percent.
    Latin America's key stock indexes at 1619 GMT:
    
 Stock indexes                            daily %     YTD %
                                Latest     change    change
 MSCI LatAm                    3,852.01     -0.36      1.79
                                                   
 Brazil Bovespa               57,231.62     -0.27     -6.10
                                                   
 Mexico IPC                   43,594.36      0.73     -0.26
                                                   
 Chile IPSA                    4,463.18     -0.38      3.76
                                                   
 Chile IGPA                   21,858.13     -0.32      3.74
                                                   
 Argentina MerVal              3,462.97      0.05     21.33
                                                   
 Colombia IGBC                14,246.02     -0.84     -3.19
                                                   
 Peru IGRA                    19,709.58     -0.44     -4.46
                                                   
 Venezuela IBC               633,248.19         0     34.32

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