* Brazil Bovespa falls 2.36 percent
* Mexico IPC down 0.85 percent
MEXICO CITY Dec 2 Brazil's benchmark Bovespa
stock index fell on Monday as shares of state-run oil company
Petrobras dropped their most in five years after the company
announced a smaller-than-expected increase in fuel prices late
Chile's bourse ended a three-session rally, while
Mexico's IPC index fell nearly 1 percent.
The Bovespa dropped 2.36 percent to 51,244.87, its
biggest one-day decline since late September.
Petroleo Brasileiro SA, as Petrobras is formally
known, said on Friday that it would raise the wholesale price of
gasoline 4 percent and the price of diesel 8 percent to cut
losses and bring domestic fuel costs closer to international
The company said it had approved a new pricing policy in
order to seek "convergence" with world fuel prices, but declined
to describe how the policy would work.
"This particular increase in diesel and gasoline prices is
far from enough to reduce the pressure on the company's balance
sheet," wrote Itau BBA analysts led by Paula Kovarsky. "We
believe that the lack of transparency about the formula will
cause frustration in the market."
Petrobras preferred shares dropped 10.37 percent, while
common shares were down 9.21 percent.
Preferred shares of iron ore mining firm Vale SA
fell 0.46 percent after the company announced a 2014 investment
budget of $14.8 billion, down from $16.3 billion in 2013, with
80 percent going to develop new iron ore projects and for
Mexico's IPC index snapped a four-day rally, dropping
0.85 percent. The index is hovering near its highest level since
A 2.49 percent drop in bottling company Femsa
weighed on the index, as did a 0.99 percent fall in shares of
America Movil, the telecoms behemoth controlled by
Mexican billionaire Carlos Slim.
Chile's IPSA index fell 0.75 percent to 3,760.50 as
shares of retailer Falabella fell 2.78 percent.
Shares of health group Cruz Blanca Salud soared
over 29 percent after health multinational Bupa-Sanitas offered
to buy control of the company for roughly $313 million.