November 12, 2013 / 11:07 PM / 4 years ago

EMERGING MARKETS-Brazil stocks drop as state-run firms sink

* Brazil’s Bovespa falls 1.56 pct, Mexico’s IPC down 0.23 pct

MEXICO CITY, Nov 12 (Reuters) - Brazilian stocks slipped for the third session in four on Tuesday, due mostly to a fall in shares of state-run companies Banco do Brasil and Petrobras.

Mexico’s IPC index edged lower, while Chile’s bourse rose 0.11 percent.

Brazil’s benchmark Bovespa stock index fell 1.56 percent to 51,804.33, its lowest level since early September.

Shares of state-run oil company Petroleo Brasileiro SA , known as Petrobras, fell 2.69 percent, contributing the most to the index’s decline.

The shares had risen slightly in early trading after an extraordinary board meeting was announced for Petrobras on Tuesday, with traders speculating that the company could be in negotiations with the government over a fuel price hike.

Petrobras imports fuel to meet domestic demand while reselling it at a loss at the government’s insistence as a means to tamp down inflation.

The shares dropped back into negative territory soon after, when Finance Minister Guido Mantega, who also serves as the chairman of Petrobras’ board, told reporters that fuel prices were not on the meeting’s agenda.

Shares of fellow state-run company Banco do Brasil SA dropped 5.3 percent, their biggest loss in over four months, after the company said consumer loan growth would likely slow for the rest of 2013.

Iron-ore miner Vale’s preferred shares dropped 2.47 percent.

Mexico’s IPC index slumped for a seventh straight session, losing 0.23 percent to 39,594.64.

Shares of miner and infrastructure company Grupo Mexico drove losses in the index, falling 2.22 percent, while bank Banorte fell 1.28 percent.

Chile’s IPSA index gained 0.11 percent to 3,781.46, boosted by a 2.03 percent rise in shares of conglomerate Copec .

Shares of LATAM Airlines rose 1.26 percent after the company said its operating margin improved in the third quarter.

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