November 14, 2012 / 11:01 PM / 5 years ago

EMERGING MARKETS-Brazil stocks fall to 10-week low, cling to support

* Anti-austerity strikes in Europe rattle investors
    * Brazil economic activity slips for first month since March
    * Bovespa falls 2.1 pct, reaches support level

    By Danielle Assalve and Gabriel Stargardter
    SAO PAULO/MEXICO CITY Nov 14 (Reuters) - Latin American
stocks fell on Wednesday, with Brazilian stocks slumping the
most in two months after data showed Latin American's top
economy shrank in September.
    Brazilian stocks closed at an 10-week low, clinging to an
important support level. Analysts warned that a break lower on
strong volume could herald steeper losses ahead.
    Risk appetite fell around the world as millions of workers
across Europe protested against the spending cuts and tax hikes
policymakers have enacted to help tackle the region's debt
    Adding to concerns that a global economic recovery could
face hurdles, data released on Wednesday showed that economic
activity in Brazil contracted in September for the first time
since March. 
    "There is a sum of negative factors both abroad and in
Brazil," said Andre Paes, a director at Infinity Asset in
Curitiba. "It all weighs on the market."
    Most analysts see the Brazilian economy recovering to about
4 percent growth in 2013 after a year of non-stop fiscal and
monetary stimulus. 
    Nonetheless, Guilherme Sand, a partner with Zenith Asset
Management in Porto Alegre, said that if those measures "aren't
having the effect they were designed to have, we could find
ourselves in a very challenging environment."
    Commodities firms drove Brazil's benchmark Bovespa index
 to its fifth decline in six sessions. The index has 
lost nearly 4 percent since the start of November.
    The Bovespa lost 2.1 percent to 56,279.36, recovering
slightly after hitting its lowest intra-day level in three
months. A break of the 56,200 support level in September
prompted investors to snap up cheap shares. 
    "The market remains uncertain, with a downward bias in the
short term, very close to an important support at 56,200
points," said technical analyst Daniel Marques at brokerage
Agora in Rio de Janeiro.
    He added that a close below 56,200 in the coming days on
strong volume "could make worse a scenario that was already
slightly negative for stocks."
    Shares of widely traded commodities firms Vale 
and Petrobras slipped 1.85 percent and 3.27 percent,
respectively, contributing most to the index's loss.
    Shares of JBS SA began the day in the black after
the world's biggest beef producer said on Wednesday it will open
six new slaughterhouses to increase its production capacity in
Brazil by 15 percent in the coming months. 
    But the shares ended the day down 3.06 percent despite the
company posting a third-quarter profit driven by its strong
Brazilian cattle business and recovering U.S. poultry
    The ability of Latin America's largest independent
investment bank to consistently chalk up healthy profits in a
tough market is debunking the "myth" among some investors that
its business model is inherently unstable, BTG Pactual Chief
Executive André Esteves said on Tuesday. 
    Units in BTG Pactual Group fell 2.28 percent.
    Brazil's stock market will be closed on Thursday for a
national holiday, reopening on Friday.
    The MSCI Latin American stock index returned
the previous session's gains, losing 1.52 percent to 3,530. 
    Mexico's IPC index snapped a two-day rally, losing
0.8 percent to 40,750.42. Mining firm Grupo Mexico 
slipped 3.0 percent, driving losses. 
    Chile's IPSA index dropped for a sixth straight
session, losing 0.46 percent to 4,187.73. The Chilean central
bank kept its benchmark interest rate on hold at 5.0 percent on
Tuesday, as expected, for the tenth consecutive month.
    Latin America's key stock indexes at 2207 GMT:
 Stock indexes                                       % change
 MSCI LatAm                        3,530.00             -1.52
 Brazil Bovespa                   56,279.36              -2.1
 Mexico IPC                       40,750.42              -0.8
 Chile IPSA                        4,187.73             -0.46
 Chile IGPA                       20,535.72             -0.46
 Argentina MerVal                  2,320.69             -1.41
 Colombia IGBC                    14,040.30             -0.88
 Peru IGRA                        20,523.54             -2.58
 Venezuela IBC                   372,840.03              0.25
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