August 5, 2014 / 4:51 PM / 4 years ago

EMERGING MARKETS-Latam currencies down on China; Itau buoys Bovespa

SAO PAULO, Aug 5 (Reuters) - Brazil's benchmark stock index
was little changed on Tuesday as strong earnings from top
private-sector bank Itau Unibanco offset a drop in
telecommunications shares following plans for a major
acquisition in the sector.
    Meanwhile, Latin American currencies weakened across the
board after disappointing data from China rang alarm bells over
the economic outlook for a key purchaser of the region's
commodity exports.
    Brazil's Bovespa stock index hovered near 56,600
points, nearly unchanged from the previous day's close. 
    But shares of Itau Unibanco Holding SA touched an
all-time high after the bank beat estimates to post a record
profit in the second quarter. 
    Telecommunications firms dropped sharply, however, as a bid
by Spain's Telefonica for Vivendi's Brazilian
broadband operator GVT caused investors to reweigh the chances
for consolidation between other players in Brazil's mobile
market. Investor bets on a breakup of TIM Participações SA
 have supported the sector's stocks in recent months.
    The broader MSCI Latin American stock index 
dipped slightly, weighed down by a drop in Mexican
telecommunications firm America Movil, which operates
under the Claro brand in Brazil.  
    Latin American currencies took a hit after data showed
growth in China's services sector slowed in July to its lowest
level in nearly nine years. 
    China is Brazil's top trading partner and a key purchaser of
Latin American raw materials such as iron ore, soybeans, copper
and petroleum. 
    Brazil's real weakened to about 2.275 per U.S.
dollar, a level it has not closed above in over two months.
    Chile's peso returned the previous session's gains,
further weakened by lower prices for copper, the
country's main export. The Colombian and Mexican pesos 
 both dropped about 0.5 percent against the dollar. 
    Yields paid on Brazil's interest-rate futures contracts
<0#DIJ:>, particularly the longest-dated ones, rose sharply as a
weakening real and estimates that electricity costs will jump
higher than expected in 2015 fueled inflation fears.
    Brazilian central bank chief Alexandre Tombini reiterated on
Tuesday that the bank is not considering reducing its benchmark
Selic interest rate in the near future despite the economic
    Key Latin American stock indexes and currencies at 1630 GMT:
 Stock indexes              Latest      Daily  YTD pct
                                          pct   change
 MSCI Emerging Markets      1,063.32    -0.56     6.64
 MSCI LatAm                 3,435.17    -0.65     8.03
 Brazil Bovespa            56,630.67     0.03     9.95
 Mexico IPC                44,533.37    -0.14     4.23
 Chile IPSA                 3,939.76     0.12     6.50
 Chile IGPA                19,202.32     0.13     5.35
 Argentina MerVal           8,159.49    -1.94    51.35
 Colombia IGBC             14,256.82     0.49     9.07
 Peru IGRA                 16,797.32    -0.79     6.62
 Venezuela IBC              2,182.53      0.4   -20.25
 Currencies                             Daily  YTD pct
                                          pct   change
                              Latest   change  
 Brazil real                  2.2773    -0.72     3.49
 Mexico peso                 13.2692    -0.56    -1.80
 Chile peso                    576.8    -0.94    -8.79
 Colombia peso              1,892.04    -0.48     2.11
 Peru sol                      2.809    -0.11    -0.57
 Argentina peso               8.2700    -0.09   -21.49
 Argentina peso                12.68     0.32   -21.14
 (Reporting by Asher Levine, editing by G Crosse)
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