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EMERGING MARKETS-Latam stocks fall; Petrobras weighs on Bovespa
January 16, 2014 / 7:48 PM / in 4 years

EMERGING MARKETS-Latam stocks fall; Petrobras weighs on Bovespa

* Mexico's IPC slides, led by America Movil
    * Brazil interest rate hike adds to Bovespa losses

    By Jeb Blount
    RIO DE JANEIRO, Jan 16 (Reuters) - Most Latin American stock
indexes fell on Thursday, led by Brazil's benchmark index, which
tumbled on concern higher U.S. and Brazilian interest rates will
choke growth and fuel-sales losses will crimp profit at
state-run oil giant Petrobras.
    The MSCI Latin America Index fell 1.28
percent in afternoon trading.
    The Bovespa index, which tracks the most-traded
stocks on the Sao Paulo stock exchange, reversed early gains to
fall 0.7 percent. Mexico's IPC index fell 0.4 percent.
    Petroleo Brasileiro SA, as Petrobras is formally
known, led the Bovespa lower, with its preferred shares, the
company's most-traded class of stock, falling 2.12 percent and
common shares shedding 2.3 percent. Petrobras accounted for
about 267 points, or more than half, of the Bovespa's 409-point
    Late on Wednesday, the Brazilian government said it was not
considering an increase in gasoline and diesel fuel prices in
June, denying a report in the Folha de S. Paulo newspaper.
    Petrobras' refining division has lost more than $12 billion
in two years because of the government's fuel-pricing policy.
This policy keeps domestic prices below world prices, forcing
Petrobras to sell rising fuel imports at a loss. Local diesel
prices are about 20 percent below world prices.
    The half-percentage-point increase in Brazil's benchmark
interest rates by the central bank late Wednesday also helped
drive stocks lower. The larger-than-expected increase, which
took the base Selic rate to 10.5 percent, could slow an already
sluggish economy. 
    Itau Unibanco Holding SA, Brazil's largest non-government
bank by assets, fell 2.2 percent. BRF SA, Brazil's largest
chicken processor, fell 2.6 percent.
    In Mexico, America Movil led the index lower,
falling 0.88 percent to 14.57 pesos.

    Latin American key stock indexes:
     Stock indexes                  daily %  YTD %
                       Latest       change   change
 MSCI LatAm           3,072.51      -1.28    -2.77
 Brazil Bovespa       49,696.97     -0.82    -2.72
 Mexico IPC           42,290.69     -0.47    -0.51
 Chile IPSA           3,648.36      -0.05    -1.37
 Chile IGPA           18,097.97     0.31     -1.02
 Argentina MerVal     5,803.63      2.14     5.57
 Colombia IGBC        12,475.27     -0.44    -3.60
 Peru IGRA            16,255.96     0.47     2.70
 Venezuela IBC        2,762.89      0.03     0.96

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