* Steelmaker CSN, Gerdau, Usiminas down after two-session
* Traders step up bets on PDG Realty; Petrobras declines
* Brazil's Bovespa down 2.07 pct; Mexico's IPC rises 0.82
MEXICO CITY, Aug 20 Brazilian stocks closed
lower on Tuesday, snapping a nine-session rally, led by declines
in shares of mining and steel producers despite resilient prices
for the commodities in global markets.
The benchmark Bovespa stock index shed 2.07 percent
to 50,506.43 points, putting an end to an over-4,000 point gain
that began two weeks ago. The rally, the longest since the
12-day rally at the end of July 2010, drove the Bovespa to its
highest level in more than two months.
"Since the Bovespa rose in previous sessions despite an
uncertain outlook and with the dollar and interest rates higher,
it's natural for there to be a correction in gains," said Joao
Pedro Brugger, an analyst at Leme Investimentos in the southern
city of Florianopolis.
Mexico's IPC index saw a recovery from an over one
percent drop in the previous session, while Chile's bourse
fell for a fifth consecutive session.
Among stocks weighing heavily on the Bovespa were shares of
firms involved in steel and oil production.
Shares of state-run oil company Petroleo Brasileiro SA
, known as Petrobras, fell 3.93 percent, contributing
most to the index's decline.
Traders said the oil company was being "shorted" heavily,
along with homebuilder PDG Realty SA which saw its
share price fall 3.6 percent.
Traders who sell securities "short" borrow shares and then
sell them in the hope that the price will fall, so they can buy
them back more cheaply, return them to the lender and pocketing
Mining giant Vale SA, the world's largest
iron-ore miner, reversed the previous session's gains, tumbling
2.81 percent while steelmakers Usinas Siderurgicas de Minas
Gerais SA, or Usiminas, Cia Siderurgica Nacional
, or CSN, and Gerdau SA, all backtracked
from a two-session surge.
Shares in steel mills fell on speculation that CSN,
Usiminas, and Gerdau are in talks to buy Porto do Sudeste,
currently operated by MMX Mineracao e Metalicos SA,
the mining company owned by embattled tycoon Eike Batista,
traders said. Often, talks of mergers and acquisitions activity
leads to declines in those stocks, on concerns of a potential
debt expenses that may be incurred in a takeover.
Mexico's IPC index added 0.82 percent to 41,825.4
points a day after its biggest one-session drop in three weeks,
despite data showing the country's economy contracted in the
second quarter for the first time since 2009.
Shares of billionaire Carlos Slim's telecommunications firm
America Movil led the index's gains, adding 2.87
percent while Mexican copper miner and railroad operator Grupo
Mexico added 3.81 percent to its share price.
Chile's IPSA index lost 0.42 percent to 3,687.19
points. The index was dragged down by retailer Cencosud
which saw its share price dip 2.3 percent.
Latin America's key stock indexes at 2043 GMT:
Stock indexes Daily YTD pct
Latest pct change
MSCI Latam 3,105.88 -0.83 -18.22
Brazil Bovespa 50,507.02 -2.07 -17.14
Mexico IPC 41,825.40 0.82 -4.30
Chile IPSA 3,687.19 -0.42 -14.28
Chile IGPA 18,270.94 -0.42 -13.29
Argentina MerVal 3,850.73 0.92 34.91
Colombia IGBC 13,719.73 -0.37 -6.77
Peru IGRA 16,681.00 0.79 -19.14
Venezuela IBC 1,290,065.87 0.11 173.65