* Global recession fears provoke sell-off
* Brazil Bovespa off 4.83 pct, Mexico IPC down 4.82 pct
(updates with closing prices, adds backgroung, quotes)
By Rachel Uranga
MEXICO CITY, Sept 22 Latin American stocks sank
on Thursday to two-year lows as gloomy data from China, Europe
and the U.S. stoked investor fears that a global recession
The MSCI Latin American stock index .MILA00000PUS
plummeted 6.61 percent, its lowest since September 2009.
"It's people everywhere, selling everything that smells of
risk," said Patricia Berry, a strategist at brokerage Intercam
in Mexico. "It's fear of a possible recession and it's fear
because nothing is being decided by authorities in Europe or
Investors shed emerging market assets as data showed sharp
declines in private sector activity in Europe and China along
with high jobless claims in U.S. reinforced global slowdown
fears. [ID:nL5E7KM1AQ] Together those economies are responsible
for 60 percent of the world output.
Market players had already been disappointed by the U.S.
Federal Reserve decision late Wednesday to cut long-term
borrowing rates by shifting holdings of U.S. Treasury debt into
longer-term bonds. Investors saw the move dubbed "Operation
Twist," as not enough to starkly improve the economy.
"There's been a lot of answers and solutions that they have
talked about," Berry said. "But nobody wants to seem to adopt
them. There doesn't seem to be many options."
Without a clear direction on the looming crisis in Europe
and a stubbornly sluggish U.S. economy, markets remain on edge,
she said, suggesting shares could slip even further.
A European Central Bank study warned on Thursday the euro
currency project was in danger and earlier in the week, the IMF
lowered global growth projections.
Highlighting the depths of the crisis, seven world leaders
on Thursday demanded Europe act more swiftly to stem the debt
crisis just as G20 finance ministers got ready to discuss the
Investors already nervous about euro zone sovereign debt
troubles are not convinced that recent measures taken by Greece
are enough to prevent it from defaulting.
"If there is a Greek default, who knows what may happen,"
said Pedro Galdi, an analyst with SLW brokerage. "Volatility is
sure to continue."
Meanwhile, the slowdown in China and the U.S. could hit
Latin America hard. Mexico sends most of its exports to its
northern neighbor, the United States, and China is Brazil's
biggest trading partner, consuming huge quantities of soy and
iron ore exports.
Brazil's benchmark Bovespa stock index .BVSP sunk 4.83
percent to 53,280. A bearish cross by the Bovespa's MACD trend
indicator signaled an end to its roughly 20-percent rally since
Commodities companies led losses, with preferred shares of
mining giant Vale (VALE5.SA) off 4.30 percent and common stock
(VALE3.SA) down 5.31 percent. Vale, the world's largest
producer of iron ore, counts China as its single biggest
State-controlled oil company Petrobras (PETR4.SA) slid 5.34
percent and rival OGX (OGXP3.SA) lost 6.61 percent as crude oil
CLc1 plunged in New York.
Mexico's IPC index .MXX fell 4.82 percent, headed for its
biggest one-day drop in more than two weeks. The index touched
its lowest point in more than a month.
Shares of America Movil (AMXL.MX), one of the world's
biggest cell phone companies by number of subscribers, lost
4.96 percent while Mexico's leading retailer Walmex
WALMEXV.MX retreated 4.51 percent.
Miner Grupo Mexico (GMEXICOB.MX) dropped 5.5 percent.
Chile's IPSA .IPSA fell 5.47 percent to 3,824. The IPSA's
next clear support is below 3,800 points, where the index
rebounded from its August plunge at a 14-month low.
Falabella FAL.SN dropped 5.1 percent, with fellow
retailer Cencosud CEN.SN down 4.0 percent.
(Aditional reporting by Asher Levine in Sao Paulo; Editing by