June 7, 2013 / 10:36 PM / in 5 years

EMERGING MARKETS-Brazil stocks slip to near 20-month low on S&P warning

* S&P revises outlook on long-term Brazil sovereign debt
    * Brazil Bovespa falls 2.39 pct, Mexico IPC down 0.85 pct

    By Asher Levine and Danielle Assalve
    SAO PAULO, June 7 (Reuters) - Brazilian stocks fell to an
almost 20-month low on Friday after Standard & Poor's warned
investors on the country's deteriorating fiscal fundamentals and
slow economic growth.
    Standard & Poor's revised its outlook on long-term ratings
for Brazil's sovereign debt to negative from stable on Thursday,
giving equity investors pause. 
    A weak domestic economy and persistent inflation pressure
has soured many foreign investors on local equities in recent
months, reflected in a more than 15 percent drop in the
benchmark Bovespa stock index so far this year.
    Friday's level was the lowest since October, 2011.
    "The S&P decision is definitely negative though in some ways
it just reflected what everyone already knows," said Marcello
Paixao, a partner with Principia Capital Management in Sao
    Paixao added that a widespread perception that the U.S.
Federal Reserve will slow its monetary stimulus program weighed
on the market in recent days, mostly due to the outlook for
fewer available funds destined for emerging markets.
    * Brazil's benchmark Bovespa stock index fell 2.39
percent to 51,618.63, notching its worst eight day slump in a
    * Shares of oil producers led declines, with state-run oil
company Petroleo Brasileiro SA, known as Petrobras,
down 3.19 percent and rival OGX Petroleo e Gas Participacoes SA
 falling 8.82 percent.
    * Shares of homebuilder Gafisa SA jumped in
opening trade after the company said it agreed to sell a 70
percent stake of its high-end Alphaville unit for 1.4 billion
reais ($654 million). The broader market selloff and
profit-taking led the shares to reverse gains later in the
session, however, closing down 10.3 percent.
    * Mexico's IPC index fell 0.85 percent to 40,232.68,
led by losses in Grupo Financiero Banorte 
and Mexican miner and infrastructure company Grupo Mexico
, down 3.56 and 2.87 percent respectively.  
    * Chile's IPSA index slipped for the third straight
day, losing 1.19 percent to 4,119.25 as shares of retailer
Cencosud fell 2.69 percent.
    Latin America's key stock indexes at 2205 GMT:
 Stock indexes                  daily   YTD %
                                    %  change
                      Latest   change  
 MSCI LatAm           3,402.7   -0.77   -10.4
 Brazil Bovespa       51,618.   -2.39  -15.31
 Mexico IPC           40,232.   -0.85   -7.95
 Chile IPSA           4,119.2   -1.19   -4.23
 Chile IGPA           20,388.   -0.94   -3.24
 Argentina MerVal     3,449.6   -0.03   20.86
 Colombia IGBC        13,366.   -0.03   -9.17
 Peru IGRA            16,114.    1.25  -21.89
 Venezuela IBC        811,521       0   72.14

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