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EMERGING MARKETS-Latam stocks choppy as US 'fiscal cliff' eyed
December 27, 2012 / 4:15 PM / 5 years ago

EMERGING MARKETS-Latam stocks choppy as US 'fiscal cliff' eyed

* U.S. policymakers return to budget discussions
    * Petrobras weighs on Brazil's Bovespa
    * Bovespa falls 0.58 pct, Mexico IPC up 0.27 pct

    By Asher Levine
    SAO PAULO, Dec 27 (Reuters) - Latin American stocks were
lower in choppy trade on Thursday as investors remained cautious
over U.S. budget negotiations, while low holiday trading volumes
contributed to volatility.
    The MSCI Latin American stock index fell for
the third time in four sessions, losing 0.38 percent to
3,777.14. 
    Financial firms helped Mexico's IPC index snap a
five-day losing streak, while state-controlled oil company
Petrobras weighed on Brazil's benchmark Bovespa index
.
    Risk appetite was limited as U.S. President Barack Obama
returned to Washington on Thursday morning to try to revive
negotiations to avert the "fiscal cliff" of automatic tax hikes
and spending cuts that could throw the U.S. economy into
recession. 
    Concerns among traders mounted later on Thursday after U.S.
Senate Majority Leader Harry Reid said the U.S. economy is
poised to go over the "cliff" in a speech on the Senate floor on
Thursday. 
    "The market is still undefined due to the United States, so
many investors are choosing to be a bit more defensive in the
last sessions of the year," said Joao Pedro Brugger, an analyst
with Leme Investimentos in Florianopolis, Brazil.
    Brugger said low trading volumes due to year-end holidays
contributed to greater-than-usual volatility. 
    Brazil's Bovespa whipsawed in early trading before settling
in negative territory in the early afternoon, when the index was
down 0.58 percent at 60,606.51 points.
    "(The Bovespa) is in a holding pattern due to the fiscal
cliff, and is facing resistance at 61,000 points," said Silvio
Campos, an economist with Tendencias Consultoria in Sao Paulo.
    Shares of oil giant Petroleo Brasileiro SA, known as
Petrobras, slipped 1.65 percent, the biggest contributor to the
index's losses. 
    While Petrobras shares are up more than 5 percent this
month, Brugger said investor jitters over the company's future
revenue stream are preventing the stock from advancing further,
despite government pledges to increase fuel prices next year.
     Due to the combination of higher demand and government
efforts to control inflation, the state-controlled company is
forced to import some fuels at market prices and then sell them
to customers at a loss.
    Shares of iron-ore mining giant Vale SA were up
0.27 percent, helping to support the Bovespa. Data on Thursday
showed annual growth in Chinese industrial profit quickened in
November from October, reinforcing signs of a steady economic
recovery in the company's No. 1 market.
    Mexico's IPC index rose 0.27 percent to 43,613.80,
though a technical indicator known as the relative strength
index neared "overbought" territory, suggesting that stocks may
be due to fall in coming sessions.
    Lender Grupo Financiero Banorte rose 1.32
percent, contributing the most to the index's gains, while
shares of rival Grupo Financiero Inbursa,
controlled by billionaire Carlos Slim, climbed 2.4 percent.
    Chile's bourse fell slightly, losing 0.21 percent to
4,291.88. 
    Industrial conglomerate Copec lost 1.09 percent,
contributing the most to the index's losses, while shares of
retailer Cencosud fell 0.74 percent. 
    
    Latin America's key stock indexes at 1532 GMT:
    
 Stock indexes                           daily %      YTD %
                          Latest          change     change
 MSCI LatAm                  3,777.14      -0.38       5.25
                                                  
 Brazil Bovespa             60,606.51      -0.58       6.79
                                                  
 Mexico IPC                 43,613.80       0.27      17.63
                                                  
 Chile IPSA                  4,291.88      -0.21       2.74
                                                  
 Chile IGPA                 21,014.99      -0.12       4.40
                                                  
 Argentina MerVal            2,863.18       1.24      16.27
                                                  
 Colombia IGBC              14,565.74      -0.16      15.00
                                                  
 Peru IGRA                  20,313.20       -0.2       4.31
                                                  
 Venezuela IBC             467,094.56       0.36     299.10

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