December 7, 2017 / 12:07 AM / a year ago

EMERGING MARKETS-Mexico stock index falls amid broader emerging markets slump

 (Updates prices, adds Mexico stock details)
    By Bruno Federowski
    SAO PAULO, Dec 6 (Reuters) - Mexico's S&P/BVM IPC share
index dropped 1.03 percent on Wednesday as the market
readjusted following news that bank Banorte would acquire a
smaller rival, creating the country's second-biggest bank.
    Banorte weighed on the index as its shares
fell 2.72 after Tuesday's spike in response to shareholder
approval of the acquisition of Grupo Financiero Interacciones
    The global MSCI Emerging Markets Index on
Wednesday hit its lowest level since October after declining for
more than a week.  
    Stocks worldwide paused amid the uncertainty of forthcoming
U.S. tax legislation and a potential U.S. government shutdown
looms if Congress fails to agree on a spending package.
    The Mexican peso fell 0.48 percent after data
showed strong job creation in the U.S. manufacturing sector,
which drove some expectations of faster-than-expected interest
rate hikes by the Federal Reserve in coming months that could
drain funds away from emerging markets.
    The figures came ahead of the U.S. Labor Department's more
comprehensive non-farm payrolls report on Friday, which includes
both public and private-sector employment. 
    Brazilian markets seesawed on Wednesday as the government
rushed to gather lawmaker support for a plan to streamline the
social security system and curb government debt.
    "The market sees the government's efforts to put the pension
reform to vote this year as positive, but nothing's set in stone
so there's reason to be wary," said Felipe Pellegrini, a manager
at Banco Confidence.
    The Brazilian real slipped 0.15 percent, while the
Bovespa stock index rose 1 percent. 
    Shares in wood pulpmaker Fibria SA jumped 6.47
percent after the company forecast a 60 percent increase in
investments next year.
    Electricity companies were two of the biggest decliners on
the Bovespa, as traders feared the privatization of the
state-owned power utility could take longer than expected.
    Shares in EDP Energias do Brasil SA fell 2.08
percent while shares in Transmissora Alianca de Energia Eletrica
SA dropped 1.51 percent.
    Latin American stock indexes and currencies at 2223 GMT:    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1101.19     -1.48     27.71
 MSCI LatAm                      2739.98     -0.12     17.06
 Brazil Bovespa                 73268.35         1     21.65
 Mexico IPC                     46973.30     -1.03      2.91
 Chile IPSA                      4888.13     -0.75     17.75
 Chile IGPA                     24613.77     -0.78     18.71
 Argentina MerVal               26470.45     -0.05     56.46
 Colombia IGBC                  10843.42      0.04      7.06
 Venezuela IBC                   1354.40      0.63    -95.73
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      3.2346     -0.15      0.45
 Mexico peso                     18.8575     -0.48     10.00
 Chile peso                       653.35      0.05      2.66
 Colombia peso                   3005.99     -0.46     -0.17
 Peru sol                          3.234      0.09      5.57
 Argentina peso (interbank)      17.2525      0.25     -7.98
 Argentina peso (parallel)          17.9      0.34     -6.03

 (Reporting by Bruno Federowski and Daina Beth Solomon; Editing
by Meredith Mazzilli)
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