Banks, steelmakers hurt Brazil stocks; currency dips

(Updates do close)

SAO PAULO, Aug 12 (Reuters) - Brazil's stock market fell on Tuesday as losses in local banks and steelmakers offset gains in oil giant Petrobras, while the local currency weakened against the U.S dollar.

The Bovespa index .BVSP of the Sao Paulo stock exchange fell 0.4 percent to 54,502.97 points after trading in positive territory for most of the session. On Monday, commodity stocks dragged the index more than 3 percent lower.

Brazil's currency, the real BRBY, lost 0.50 percent to end at 1.624 per U.S. dollar. Traders said foreign investors in Brazil continued to purchase dollars amid global market uncertainty.

Brazilian banks suffered in sympathy with their U.S. counterparts. News that JP Morgan Chase (JPM.N: Quote, Profile, Research) had racked up $1.5 billion of losses so far this quarter on mortgage-linked assets fueled worries of more fallout from the credit crunch.

Banco do Brasil (BBAS3.SA: Quote, Profile, Research) fell 3.41 percent to 21.80 reais, Banco Bradesco (BBDC4.SA: Quote, Profile, Research) was down 1.3 percent at 30.40 and Unibanco (UBBR11.SA: Quote, Profile, Research) shed 1.39 percent to 19.18 reais.

Steel companies, led by Gerdau and Usiminas, fell for a second consecutive day on expectations that weaker metals demand could prevent aggressive price hikes next year.

Gerdau (GGBR4.SA: Quote, Profile, Research) fell 3.08 percent to 28.02 reais, while Usiminas (USIM5.SA: Quote, Profile, Research) lost 3.04 percent to 55.90 reais and CSN (CSNA3.SA: Quote, Profile, Research) dropped 2.49 percent to 51.61 reais.

Investors are worried that a slowing global economy is going to hurt appetite for metals from top consumers such as China and the United Sates.