* Emerging market shares reflect Fed outlook
* Tighter China cash market sinks commodities shares
* Brazil Bovespa falls 2.95 pct, Mexico IPC down 1.94 pct
By Asher Levine
SAO PAULO, June 24 Latin American stocks dropped
on Monday as part of a wider sell-off in emerging market shares
following the U.S. central bank's signal last week that it would
scale back its bond-buying program.
Meanwhile, tighter financial conditions in China made a big
impact on Latin American commodities exporters whose iron ore,
soybeans, copper and petroleum are an important market for
Last week China's central bank allowed money market rates to
soar without providing additional financing, leading to a sudden
tightening of cash markets and a sharp fall in Chinese shares on
"Some Chinese companies and banks have stopped issuing bonds
because of the deterioration of market conditions and the
central bank seems to be comfortable with that," said Gustavo
Mendonca, an economist with Saga Capital in Rio de Janeiro.
Brazil's benchmark Bovespa stock index fell to an
over four-year low, dropping 2.95 percent to 45,666.04.
Mendonca said weaker domestic data in Brazil, such as a drop
in consumer confidence numbers on Monday, are also contributing
to the Bovespa's decline, which is among the world's
worst-performing stock indexes.
Shares of mining firm Vale SA, which counts China
as its biggest customer, dropped 5 percent, its most in more
than two months, while state-run oil company Petroleo Brasileiro
SA, known as Petrobras, lost 3.2 percent.
Shares of shipbuilding company OSX, controlled by
billionaire Eike Batista, fell 8 percent after a Brazilian
newspaper reported over the weekend that the firm had failed to
make a debt payment, though OSX said the story was false in a
securities filing on Monday.
Mexico's IPC index fell to its lowest level in over a
year, slipping 1.94 percent to 37,297.33.
Shares of telecommunications firm America Movil,
controlled by billionaire Carlos Slim, fell 1.19 percent,
contributing most to the index's losses, while mining firm Grupo
Mexico fell 1.9 percent.
Chile's IPSA index fell for the fourth straight
session as shares of retailer Falabella slipped 2.3
Latin America's key stock indexes at 1457 GMT:
Stock indexes daily % YTD %
Latest change change
MSCI LatAm 2,949.05 -2.3 -20.52
Brazil Bovespa 45,666.04 -2.95 -25.08
Mexico IPC 37,297.33 -1.94 -14.66
Chile IPSA 3,743.50 -2.05 -12.97
Chile IGPA 18,842.85 -1.67 -10.57
Argentina MerVal 2,928.04 -4.65 2.58
Colombia IGBC 12,522.55 -2.02 -14.90
Peru IGRA 15,459.43 -1.09 -25.06
Venezuela IBC 972,606.00 1.87 106.31