Brazil stocks tumble on Vale, CSN losses; real firm

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SAO PAULO, July 2 (Reuters) - Brazil's stock market had its biggest one-day slide in almost four months on Wednesday as investors sold off shares of oil company Petrobras, mining giant Vale and other widely traded firms because of a slump in U.S. equities.

The Sao Paulo Stock Exchange's benchmark Bovespa index .BVSP dropped 3.61 percent to 61,106.22 points, the biggest daily decline since a 5 percent slump on March 19. The index, which has lost 17 percent since closing at a record high in late May, ended at its lowest level since March 31.

Shares of Vale and steelmakers Gerdau and CSN weighed on the index, tracking a global sell-off in mining stocks after a sharp fall in coal prices.

U.S. markets tumbled, with the Dow Jones industrial average .DJI sinking into bear market territory with a 1.46 percent drop and the Nasdaq Composite Index .IXIC falling 2.3 percent.

The gloom put pressure on Brazilian stocks as investors reduced their holdings in emerging markets to make up for losses in the United States.

"Investors aren't taking money from Brazil because of domestic issues, but to make up for some positions abroad," said Marcelo Voss, chief economist at the Liquidez brokerage, adding that losses in U.S. markets may continue to weigh on Brazil's currency.

Brazil's currency, the real BRBY, firmed 0.12 percent to 1.603 per dollar.

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