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* Brazil Bovespa falls 1.99 pct, Mexico IPC down 1.26 pct
MEXICO CITY, Jan 23 (Reuters) - Commodities producers drove Brazil's benchmark Bovespa stock index down on Thursday following weak manufacturing data from top trade partner China and a critical assessment of Brazil's economic policy from top bond fund manager Pimco.
Mexico's IPC index sunk the most since the first week of this year, while Chile's bourse lost 0.73 percent.
Pacific Investment Management Co, as Pimco is formally known, expressed concern about Brazil's deteriorating public finances, citing loose fiscal policy, the excessive role of subsidized credit and tightening monetary policy.
"With the volatility currently being experienced by emerging markets as the Federal Reserve tapers, and ahead of October Brazilian presidential elections, the scaling of Brazil investments among non-dedicated emerging markets investors should be moderated," wrote Michael A. Gomez, co-head of Pimco's emerging markets portfolio management team in an investor note on Thursday.
Brazil's Bovespa index fell nearly 16 percent last year, and is already down more than 6 percent in 2014, as investors lose confidence about local economic growth.
Pimco's report contributed to further losses in Brazil's Bovespa on Thursday, which started the day lower after data showed activity in China's factory sector contracted in January for the first time in six months.
China is the No. 1 purchaser of Brazilian commodities exports such as iron-ore and soybeans, and changes in the outlook for Chinese economic growth tend to have a strong impact on some of the Bovespa's most heavily-weighted shares.
The Bovespa posted its biggest one-day loss in two weeks, closing 1.99 percent lower at 48,320.64 points.
Iron-ore mining giant Vale SA, which counts China as its biggest customer, dropped 2.63 percent while state-run oil company Petroleo Brasileiro SA, known as Petrobras, fell 2.34 percent.
Shares of homebuilder Brookfield Incorporacoes SA soared 18.92 percent amid market chatter that the company could be taken private, traders said. In a securities filing after market close, the company said it "has no knowledge of any fact that could justify (the stock's) oscillations."
Mexico's IPC index also fell on the China data, traders said.
Broadcaster Televisa, down 3.01 percent, drove losses in the index, while telecoms giant America Movil , which is controlled by Mexican billionaire Carlos Slim, fell 0.96 percent after Barclays cut its target price on the company.
Chile's IPSA index lost 0.73 percent. Shipbuilder Vapores fell 12.12 percent after the company said on Wednesday it had reached a non-binding agreement with Germany's Hapag-Lloyd to join forces.