July 2, 2012 / 10:21 PM / 5 years ago

EMERGING MARKETS-Weak factory data hits Latam stocks, OGX jumps

* Weak Brazil, U.S. manufacturing data weigh
    * Energy firm OGX rebounds from slump
    * Brazil Bovespa up 0.62 pct, Mexico IPC down 0.23 pct


    By Danielle Assalve and Rachel Uranga
    SAO PAULO/MEXICO CITY, July 2 (Reuters) - Weak manufacturing
data in Brazil and the United States weighed on Latin American
stocks, but shares in Brazilian billionaire Eike Batista's oil
firm OGX rebounded from a deep tumble.
    Shares in Mexico's benchmark index slipped, while the surge
in OGX shares kept Brazil's Bovespa in positive territory even
as other shares sank.
    Low volume ahead of the U.S. July 4 holiday added to
volatility, he said.
    Brazilian stocks are down some 21 percent from a high in
March, hurt by slowing growth in Latin America's top economy,
fears that Europe is sliding into recession and signs that U.S.
growth is waning. 
    "The market is a bit without direction, awaiting for new
developments coming from the meeting of the European Central
Bank this Thursday and (U.S.) payroll next Friday," said Gustavo
Mendonça, partner at Oren Investimentos in Rio de Janeiro.
    Data showed Brazil's manufacturing output in June shrank for
the third straight month. 
    "The forecasts for the Brazilian economy, that are pointing
lower and lower every week, has been adding to the negative
sentiment in the market," Mendonça said 
    Further hurting sentiment, data showed the U.S.
manufacturing sector unexpectedly contracted in June for the
first time in nearly three years. 
    The Bovespa found support last month at its lowest level
since October, but shares have failed to mount much of a
recovery, trading in a narrow range. 
    Brazil's benchmark Bovespa stock index rose 0.62
percent, helped by a 14.55 percent rally in OGX shares. 
    The energy start up fell more than 40 percent last week
after a disappointing forecast at his flagship oil producer
prompted broader concerns that Batista's ventures may stumble
along with the country's economy.
    Ratings agency Standard & Poor's said in a statement that
the downward revision in production would not affect OGX's
credit rating.
    Brazil's central bank has taken steps to support the economy
by slashing its benchmark interest rate to record lows and is
expected to continue doing so. 
    Lower rates could drive some of the country's institutional
investors into stocks in the search for higher returns, said
Hydalgo Junior, which could auger well for Brazilian stocks. 
    "With the lower interest rates we have nowadays in Brazil,
some investors, principally pension funds, will need to take on
more risk," he said.
    Shares in builders fell, with Gafisa losing 4.18
percent while Rivals Rossi fell 3.65 percent.
    Mexico's IPC index retreated from Friday's
record-high, slipping 0.23 percent. Retail giant Wal-Mart de
Mexico fell 2.55 percent and conglomerate Alfa
 shed 3.34 percent.
    Weak manufacturing data in the United States contributed to
the IPC's fall, but stocks got some support following the
country's presidential election, where Enrique Pena Nieto, an
opposition front runner who campaigned on fiscal and energy
reforms, claimed victory. 
    "It's had a good influence on the market," said Gerardo
Copca, a strategist at consultancy Metanalisis in Mexico City.
"If Pena Nieto ... makes good on his promises it's going to
really benefit the construction sector." 
    Among other reforms, Pena Nieto has pledged to boost
investment in the country's infrastructure and spur bank
lending, raising hopes for the country's slow growing economy. 
    Mexican construction company ICA advanced 3.88
percent while homebuilder Urbi rose 1.56 percent.
    Chile's stock market was closed due to a religious holiday. 
    Latin America's key stock indexes at 21:04 GMT
    
 Stock indexes                      daily %   year-to-date %
                         Latest      change           change
 MSCI LatAm               3,562.99     1.18            -1.09
                                             
 Brazil Bovespa          54,692.79     0.62            -3.63
                                             
 Mexico IPC              40,108.92    -0.23             8.18
                                             
                                                            
 Chile IGPA                National Holiday             4.72
                                             
 Argentina MerVal         2,369.22     0.96            -3.79
                                             
 Colombia IGBC             National Holiday             3.43
                                             
 Peru IGRA               20,645.10     2.17             6.02
                                             
 Venezuela IBC                0.00        0          -100.00

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