March 22, 2013 / 12:45 AM / 5 years ago

EMERGING MARKETS-Brazil stocks hit 4-month low on euro zone data, Cyprus

* Euro zone PMI data worse than expected in March
    * Bovespa closes at lowest level since mid-November
    * Brazil Bovespa falls 0.81 pct, Mexico IPC flat

    By Asher Levine and Danielle Assalve
    SAO PAULO, March 21 (Reuters) - Brazilian stocks hit a
four-month low as concern over global economic growth drove down
shares of oil producers, miners and banks. 
    Carlos Slim's telephone giant, America Movil,
drove gains in Mexico's IPC index, helping the bourse to
eke out a small rise, while Chile's bourse ended a
two-day winning streak with a small loss.
    Shares tracked global markets lower after Markit's Flash
Eurozone Composite Purchasing Managers' Index (PMI) showed
economic growth in the euro zone contracted more than expected
in March.
    "With the exception of the United States, which has had a
substantial economic improvement, the data has been coming in
quite poorly in other places," said Marcello Paixao, a partner
with Principia Capital Management in Sao Paulo. 
    Concerns over global economic growth tend to lead investors
away from riskier Latin American assets in favor of safe-haven
investments such as the U.S. dollar.
    Adding to investor jitters, the European Central Bank on
Thursday gave Cyprus a Monday deadline to raise billions of
euros in order to receive a critical bailout and avoid a banking
sector collapse. 
    The global risk-off attitude led to a 0.81 percent decline
in Brazil's benchmark Bovespa stock index, which has
fallen in seven of the last eight sessions.  
    Shares of Brazil's state-led oil company, Petrobas
 fell 1.7 percent, while OGX Petroleo e Gas
Participacoes SA, owned by billionaire Eike Batista
dipped 4.58, pulling down the bourse.
    Brazilian iron ore miner MMX also owned by
Batista, fell more than 7 percent despite data that showed an
improved economic growth outlook for China, a major customer for
the commodity. 
    The Bovespa is currently at its lowest level since
mid-November, and has lost nearly 9 percent this year alone.
    "We have the combination of corporate earnings that are
still not very good and government mismanagement (of the
economy)," Paixao said. "Foreign investors are not very
optimistic about Brazil."
    While most analysts expect interest rates to rise in coming
months to deal with mounting inflation pressure, the Bovespa may
not suffer additional losses as a result.
    "We believe that better growth accompanied by fewer
interventionist policies will minimize the negative effects that
an interest rate rise would create among investors," JPMorgan
analyst Emy Shayo Cherman wrote in an investor note on Thursday.
    Mexico's IPC index eked out a gain of 0.08 percent to
close at 42,531.07, boosted by America Movil shares which spiked
4.31 percent.
    The telecom giant's stocks had fallen heavily since Mexico
announced a reform of the sector last week aimed at boosting
competition by capping market share. 
    But the firm said on Thursday afternoon it has obtained the
exclusive transmission rights in Latin America for the 2014
winter Olympic games as well as the 2016 summer Olympic games. 
    The announcement boosted some market bets that the company
stands to gain more by entrance into the paid TV sector - from
which it has been barred by regulators - than it stands to lose
by ceding share of the telephone and internet markets. 
    Mexico's Congress is slated to vote on a sweeping reform
bill later on Thursday. 
    Chile's IPSA index fell for the first session in
three, dropping 0.15 percent to 4,450.35 as shares of industrial
conglomerate Copec fell 2.05 percent.
    Latin America's key stock indexes at 2321 GMT:
 Stock indexes                     daily %       YTD %
                       Latest       change      change
 MSCI LatAm           3,764.98       -0.56       -0.86
 Brazil Bovespa      55,576.67       -0.81       -8.82
 Mexico IPC          42,531.07        0.08       -2.69
 Chile IPSA           4,450.35       -0.15        3.46
 Chile IGPA          21,780.38       -0.16        3.37
 Argentina MerVal     3,489.99        0.13       22.27
 Colombia IGBC       13,925.71       -0.15       -5.37
 Peru IGRA           19,966.45        0.57       -3.21
 Venezuela IBC      632,130.00           0       34.09
0 : 0
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