Brazil stocks slip on profit-taking, real weakens

(Updates to close)

SAO PAULO, Sept 17 (Reuters) - Brazilian stocks slipped on Thursday as investors took profits after strong gains in previous sessions.

The benchmark Bovespa index .BVSP seesawed in early trading, turning positive after a start in the red.

But the index closed in negative territory, losing 0.29 percent to 60,236.03, a day after the index closed about 60,000 points for the first time since July 21, 2008.

Brazil's currency, the real (BRBY), weakened 0.44 percent to 1.808 per U.S. dollar. The real strengthened on Wednesday to its strongest against the dollar in almost a year.

The roughly 9 percent advance in the index since Sept. 2 left stocks open to "some light profit-taking today," said Debora Morsch, chief executive of Solidus brokerage in the southern city of Porto Alegre.

The swiftness of Brazil's recovery has surprised, Morsch said, fueling the recent gains. "We're in a privileged moment in Brazil," she said.

Leading losses were preferred shares of mining giant Vale (VALE5.SA), the world's largest iron ore producer, which fell 0.99 percent to 35 reais.

Investors also booked profits on real estate companies, which have seen strong advances in recent weeks on the back of lower interest rates and a government program to boost low-income housing construction.

Gafisa (GFSA3.SA) lost 1.79 percent to 29 reais, Cyrela (CYRE3.SA) sank 3.38 percent to 24 reais and Rossi Residencial (RSID3.SA) fell 2.21 percent to 13.30 reais.

The index's biggest stock, state-controlled energy company Petrobras (PETR4.SA), slipped 0.15 percent to 34.30 reais as crude CLc1 settled 0.06 percent lower. The dip in crude came on demand worries about high inventories.

In contrast, JBS (JBSS3.SA), the world's largest beef processor, gained 0.81 percent to 8.72 reais. The company said on Wednesday that it would buy Brazilian rival Bertin. In addition, bankrupt U.S. chicken producer Pilgrim's Pride Corp (PGPDQ.PK) said it agreed to sell a 64 percent stake to JBS for $800 million. For more see [ID:nN16119897].

Shares of credit card processor VisaNet (VNET3.SA) added 4.67 percent to 17.69 reais. Brazil's antitrust regulator said on Wednesday it had overruled action by a government agency against Brazil's VisaNet, which is not part of the Bovespa index, for alleged anti-competitive practices. [ID:nN16154680]

Yields on Brazilian interest rate futures contracts <0#DIJ:> largely rose as recent positive economic indicators in Brazil, including the 1.9 percent second-quarter growth reported last Friday, led investors to believe the central bank could raise interest rates in 2010.

Recent data on retail sales and payroll expansion have strengthened hopes of a swift Brazilian recovery from the economic crisis.

"The strong reading reinforces the growth outlook for the rest of the year and supports our expectations that the (central bank) will start tightening in" the first half of next year, noted Enrique Alvarez, head of research at IDEAglobal in New York. (Reporting by Luciana Lopez; Additional reporting by Guillermo Parra-Bernal; Editing by James Dalgleish)