April 30, 2014 / 8:01 PM / 4 years ago

EMERGING MARKETS-Brazil stocks fall with Ambev; mining shares drop

By Walter Brandimarte
    RIO DE JANEIRO, April 30 (Reuters) - Brazilian stocks mostly
fell on Wednesday after a government decision to raise taxes on
beer and sodas dragged down shares of beverage maker Ambev
 by more than 5 percent.
    A drop in mining shares also weighed on Brazilian and
Mexican equity markets after both Vale SA and Grupo
Mexico reported lower quarterly earnings.
    Trading in Latin American stock and currency markets was
generally slower before Thursday's Labor Day holiday, which will
shut down bourses across the region.
    MSCI's benchmark stock index for Latin America
 lost 0.5 percent as Brazil's Bovespa index
 slid 0.7 percent.
    Ambev was the biggest weight on the Bovespa index, with its
shares poised to close at their lowest level in at least six
weeks. Ambev, Latin America's largest brewer, became the latest
victim of a government attempt to meet its fiscal savings goal
by raising taxes on specific products - this time on beverages.
    Vale's shares fell about 1.5 percent after the company said
its first-quarter profit shrank by nearly a fifth from a year
earlier as prices of iron ore, its main product, fell sharply.
    Although Vale's results were mostly in line with market
expectations, some analysts were disappointed at the price the
company received for iron ore sold during the quarter in
comparison to spot prices.
    Vale's shares will likely be under pressure during the next
few months because of the "vision that iron ore prices will
remain on a declining trend as we approach 2015," analysts with
Brazil's BTG bank said.
    In Mexico, the IPC stock index was little changed as
a 2.5 percent gain in shares of cement maker Cemex 
was offset by a 1.4 percent decline in shares of Grupo Mexico.
    Cemex's first-quarter profit beat analysts' forecasts,
helped by higher U.S. demand for cement. Grupo Mexico reported a
35 percent drop in profits.  
    In currency markets, the Brazilian real  was
little changed at 2.2315 per dollar. It erased early losses
after the Federal Reserve sounded upbeat about prospects for the
U.S. economy, supporting global appetite for risk.
    Key Latin American stock indexes and currencies at 1935 GMT:
     Stock indexes                   daily %    YTD %
                        Latest       change     change
 MSCI Emerging         995.35        -0.46      -0.28
 MSCI LatAm            3249.54       -0.54      2.08
 Brazil Bovespa        51503.09      -0.65      -0.01
 Mexico IPC            40715.28      0.03       -4.71
 Chile IPSA            3898.96       1.35       5.40
 Chile IGPA            19135.01      1.08       4.98
 Argentina MerVal      6755.82       -1.05      25.32
 Colombia IGBC         13554.77      0.4        3.70
 Peru IGRA             15499.53      1.66       -1.61
 Venezuela IBC         2339.8        0.25       -14.50
 Currencies                          daily %    YTD %
                                     change     change
 Brazil real           2.2315        0.05       5.62
 Mexico peso           13.0679       0.28       -0.29
 Chile peso            564.7         -0.60      -6.84
 Colombia peso         1933          0.00       -0.05
 Peru sol              2.808         0.00       -0.53
 Argentina peso        8.0000        0.03       -18.84
 Argentina peso        10.52         0.48       -4.94

 (Additional reporting by Priscila Jordao in Sao Paulo; Editing
by Leslie Adler)

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