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EMERGING MARKETS-Latam stocks slip on weak global data
July 2, 2012 / 5:21 PM / 5 years ago

EMERGING MARKETS-Latam stocks slip on weak global data

 * Brazil, U.S. manufacturing down, euro zone at 2.5-year low
 * Brazil Bovespa falls 0.16 pct, Mexico IPC down 0.37 pct
 By Danielle Assalve and Rachel Uranga
 SAO PAULO/MEXICO CITY, July 2 (Reuters) - Latin American
stocks slipped o n M onday as weak manufacturing data from several
of the world's major economies dampened investor optimism over a
global economic recovery.
 Banks and commodities exporters contributed most to a slight
 drop in Brazil's Bovespa index, while retail giant Walmex
 weighed on Mexico's IPC index. Chile's stock market
was closed due to a religious holiday. 
 Shares slipped early in the session after data showed
manufacturing activity in the euro zone continues to hold at a
2-1/2 year low, while Brazil's manufacturing output in June
shrank for the third straight month and export orders fell
across Asia's major economies. 
 The outlook for global economic growth was dealt a further
blow later in the session after data showed the U.S.
manufacturing sector unexpectedly contracted in June for the
first time in nearly three years. 
 "The data leaves investors worried that the very modest
recovery in the U.S. economy may be vulnerable," said Edson
Hydalgo Junior, a director at Sao Paulo brokerage InTrader. "The
market will remain quite tense and volatile as it follows the
 Brazil's benchmark Bovespa stock index slipped for
the third session in four. Preferred shares of iron-ore giant
Vale lost 0.69 percent, contributing most to the
index's fall, while those of state-controlled oil producer
Petrobras slipped 1.27 percent.
 The Bovespa index is down more than 4.5 percent in 2012
after fears of a deteriorating euro zone debt crisis and weaker
economic growth, both in Brazil and abroad, drove investors away
from riskier assets. 
 Brazil's central bank has taken steps to support activity in
Latin America's largest economy by slashing its benchmark Selic
interest rate to record lows and is expected to continue doing
so. That may lead some of the country's institutional investors
away from Selic-indexed bonds, 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, returning to the equities market to look for
returns," he said.
  Shares of Cielo, Brazil's largest card payment
processor, slipped 0.49 percent. The company said o n M onday it
will buy U.S. payment solutions provider Merchant e-Solutions
for $670 million, enabling it to settle more online purchases.
 Mexico's IPC index capped a six-day rally and
retreated from record-high levels achieved in the previous
session. Retail giant Wal-Mart de Mexico fell 1.59
percent, contributing most to the index's decline, while
bottling firm Femsa rose 1.43 percent.
 While weak manufacturing data in the United States 
contributed to the IPC's fall, stocks were supported early in
the session by the country's presidential election, where
Enrique Pena Nieto, an opposition front runner who campaigned on
fiscal and energy reforms, claimed victory. [ID: nL2E8I108P]
 "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 2.82
percent while Mexican homebuilder Urbi Desarrollos Urbanos
 rose 0.86 percent.
 Latin America's key stock indexes at 16:46 GMT
 Stock indexes                           daily %      YTD %
                       Latest          change     change
 MSCI LatAm                  3,549.65        0.8      -2.24
 Brazil Bovespa             54,266.50      -0.16      -4.38
 Mexico IPC                 40,051.00      -0.37       8.02
 Chile IPSA                  4,400.10       1.47       5.33
 Chile IGPA                 21,079.74       1.24       4.72
 Argentina MerVal            2,349.36       0.11      -4.60
 Colombia IGBC              13,417.51       1.55       5.94
 Peru IGRA                  20,427.32       1.09       4.90
 Venezuela IBC                   0.00          0    -100.00

 (Writing by Asher Levine; Editing by Dan Grebler)

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