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EMERGING MARKETS-Brazil stocks fall on global liquidity outlook
July 5, 2013 / 4:25 PM / in 4 years

EMERGING MARKETS-Brazil stocks fall on global liquidity outlook

* U.S. jobs report for June better than expected
    * China to begin tightening credit
    * Brazil Bovespa falls 2.23 pct, Mexico IPC down 1.74 pct

    By Lucas Iberico-Lozada
    SAO PAULO, July 5 (Reuters) - Brazilian stocks fell on
Friday, erasing all of the previous session's gains, as
expectations for tighter liquidity in the United States and
China sapped investor demand for emerging market equities.
    Mexico's IPC index fell its furthest in over two
weeks, while Chile's bourse slipped for the fourth
session in the last five.
    Better-than-expected U.S. labor data on Friday heightened
expectations that the U.S. Federal Reserve would begin to taper
its bond-buying program later this year. 
    Abundant global liquidity from the world's major central
banks has supported demand for riskier emerging market assets
such as Brazilian stocks in the past, though much of those funds
are now leaving the Bovespa as the outlook for more cheap
capital diminishes.
    "Good news (in the United States) now means that the Bovespa
drops," said economist Andre Perfeito of Gradual Corretora in
Sao Paulo. "We are living in a moment of transition for foreign
investors." 
    Stocks were pressured further after China's government said
on Friday that it would move ahead with a plan to tighten credit
in order to end the Chinese economy's dependence on cheap debt.
 
    China is Brazil's biggest trading partner and a key
purchaser of Latin American commodities exports such as iron
ore, soy, copper and petroleum.
    Brazil's benchmark Bovespa stock index fell 2.23
percent to 44,742.90, with shares from some of Brazil's largest
commodities exporters driving losses.
    State-run oil company Petroleo Brasileiro SA,
known as Petrobras, dropped 4.7 percent. Petrobras shares are on
track to close Friday's session at their lowest level in 4-1/2
years.
    Mining giant Vale SA shed 3.49 percent, nearly
erasing the previous session's gains. 
    Shares of homebuilder Gafisa SA jumped over 5
percent. BTG Pactual Group analysts raised their recommendation
on the shares to "buy" from "neutral" on Friday, saying recent
losses in the stock were overdone. 
    Mexico's IPC index fell 1.74 percent to 40,483.05
after meeting technical resistance at 41,200 points for the
fifth straight session.
    Telecommunications firm America Movil, controlled
by billionaire Carlos Slim, fell 1.57 percent, contributing most
to the index's losses.
    Chile's IPSA index nudged 0.69 percent lower to
3,839.51 points. The index is on track to post a nearly 5
percent weekly loss, its worst in over a year.
    Industrial conglomerate Empresas Copec SA fell 0.88
percent while lender Banco Santander Chile slipped 2
percent.
    
    Latin America's key stock indexes at 1533 GMT:
 Stock indexes                             daily %       YTD %
                                            change      change
                              Latest                
 MSCI LatAm                    3,033.35      -2.44      -18.13
                                                    
 Brazil Bovespa               44,742.90      -2.23      -26.59
                                                    
 Mexico IPC                   40,483.05      -1.74       -7.37
                                                    
 Chile IPSA                    3,839.51      -0.69      -10.74
                                                    
 Chile IGPA                   19,064.47      -0.54       -9.52
                                                    
 Argentina MerVal              3,051.25      -1.44        6.90
                                                    
 Colombia IGBC                12,637.79      -0.71      -14.12
                                                    
 Peru IGRA                    15,270.27      -0.94      -25.98
                                                    
 Venezuela IBC                     0.00          0     -100.00

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