July 16, 2014 / 4:40 PM / 4 years ago

EMERGING MARKETS-Bank shares weigh on Brazil's Bovespa; Latam currencies flat

SAO PAULO, July 16 (Reuters) - Brazil's benchmark Bovespa
stock index fell on Wednesday as a decline in bank shares offset
gains in mining firm Vale and telecommunications company Grupo
    Moves in the rest of Latin America's stock indexes and
currencies were muted, while Chile's markets were closed for a
local holiday.
    The Bovespa erased early gains, capping a
four-session rally that led the index to its highest close since
late October in the previous session.
    "With the gains over the past few days it's normal to see
some settling," said Silvio Campos Neto, an economist with
Tendencias in Sao Paulo.
    Losses were concentrated in shares of Itau Unibanco Holding
SA and Banco Bradesco SA, two of Brazil's
biggest banks, after Morgan Stanley analysts cautioned that
earnings could "decelerate significantly" at the firms.
    Encouraging economic data from China supported the index,
however, by boosting shares of mining firm Vale SA,
which counts the Asian giant as its biggest customer. 
    Shares of telecommunications firm Grupo Oi SA jumped the
most in six months after the company renegotiated the terms of a
merger with Portugal Telecom to avoid the credit risk
from a debt investment made by the latter. 
    Brazil's currency, the real  fluctuated near
unchanged territory, while yields on Brazilian interest rate
futures <0#DIJ:> edged lower on thin volume. 
    Brazil's central bank will make its interest rate
announcement after market closes. All 60 economists surveyed in
a Reuters poll last week predicted the bank will hold rates at
the current 11 percent. 
    Chile's central bank cut its benchmark interest rate on
Tuesday for the first time since March as worries about a
slowing economy outweighed concerns over above-target inflation.
    Chile's markets are expected to reopen on Thursday.
    Key Latin American stock indexes and currencies at 1624 GMT:
 Stock indexes                            daily %     YTD %
                              Latest       change    change
 MSCI Emerging Markets          1066.34       n/a      6.35
 MSCI LatAm                    3,467.31     -0.22      8.56
 Brazil Bovespa               55,645.85     -0.59      8.04
 Mexico IPC                   43,917.33      -0.1      2.79
 Chile IPSA                    3,964.22     -0.01      7.16
 Chile IGPA                   19,285.47     -0.04      5.81
 Argentina MerVal              8,547.79     -0.89     58.56
 Colombia IGBC                13,902.61      0.85      6.36
 Peru IGRA                    16,909.32      0.28      7.34
 Venezuela IBC                 2,117.98      0.69    -22.60
 Currencies                               daily %     YTD %
                                           change    change
 Brazil real                     2.2229     -0.13      6.02
 Mexico peso                    12.9360      0.07      0.73
 Chile peso                    557.4000    n/a        -5.62
 Colombia peso                1868.0000      0.04      3.43
 Peru sol                        2.7810    n/a         0.43
 Argentina peso                  8.1500      0.03    -20.34
 Argentina peso (parallel)      12.2000      0.00    -18.03
 (Editing by Bernadette Baum)
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