Brazil stocks fall again with Vale, currency firms

SAO PAULO, July 2 (Reuters) - Brazilian stocks fell in early trade on Wednesday led by a drop in miner Vale, but the currency firmed, with the market keeping a close eye on volatile bourses in Europe and the United States.

The Sao Paulo Stock Exchange's benchmark Bovespa index .BVSP, which slumped 2.5 percent to its weakest in almost three months the previous day, shed another 1.08 percent to 62,713 points.

Vale (VALE5.SA: Quote, Profile, Research) shares weighed on the index with a 3 percent drop tracking a global sell-off in mining stocks after a sharp fall in coal prices.

Brazil's currency, the real BRBY, firmed 0.19 percent to 1.6 per dollar after shedding 0.5 percent the previous session.

"Volatility will go on," said Vanderlei Arruda, foreign exchange manager with Souza Barros brokerage. "The market remains fixed on main bourses and is tied to the moves abroad, especially to oil prices."

Interest rate futures <0#DIJ:> firmed on the BM&F commodities and futures exchange in Sao Paulo, as concern about rising inflation prevailed.

In the stock market, foreign investors were selling liquid Brazilian assets. Bovespa data showed a record net outflow of $8 billion in the first 27 days of June from the over-the-counter market.

"Investors, especially foreigners, are seeking liquidity in the emerging markets and Brazil is the most liquid emerging market," said Raffi Dokuzian, a Banif bank manager.

Mining company Vale, the second-heaviest stock in the Bovespa index, fell 3.08 percent to 44.62 reais.