EMERGING MARKETS-Chilean stocks down on foreign sales; Petrobras reverses gains
(Updates prices, explains Petrobras reversal) By Asher Levine and Anthony Esposito SAO PAULO/SANTIAGO, May 20 (Reuters) - Chilean stocks dropped on Tuesday as weak earnings spurred foreigners to sell shares in a low-volume session, while Brazil's stock index fell as Petrobras shares reversed early gains. The broader MSCI Latin American stock index posted its biggest loss in over a month. Chile's blue-chip IPSA index slid 1.2 percent, with commodities-linked companies falling hardest in the world's top copper producer. Shares in CAP dropped after the iron-ore and steel producer posted disappointing results late Monday night, while heavy-weight Empresas Copec, Chile's largest industrial conglomerate, sank on expectations it will post weak earnings later this week, a trader said. The Chilean peso weakened its most in nearly a month as the price for copper, the country's main export, sank the most in nearly two weeks. Chile's market will be closed on Wednesday for the Navy Day holiday. Dollar demand tends to rise the day before market holidays as traders look to close positions, analysts said. Elsewhere in the region, Brazil's Bovespa stock index slipped its most since mid-April as preferred shares of state-controlled oil firm Petroleo Brasileiro SA, known as Petrobras, reversed early gains. Petrobras shares rose early in the day when investors upped their bets on the stock in anticipation of a closely watched electoral poll due Thursday. Recent polls showing a decline in President Dilma Rousseff's approval rating ahead of October's election have driven big gains in the stock as shareholders hold out hope for a more market-friendly administration. The shares dropped abruptly in late afternoon trading after a local news website said Rousseff was unlikely to lose support in the poll. Mexican stocks were little-changed as a decline in lender Grupo Financiero Banorte offset bargain-hunting for shares of telecommunications firm America Movil a day after the stock slid 4 percent. In currency markets, Brazil's real and Mexico's peso both weakened slightly against the dollar, as political unrest in Thailand and concern over Chinese economic growth led to a decline in global risk appetite. The Colombian peso weakened 0.16 percent to 1,921. Colombia's President Juan Manuel Santos said on Tuesday it would be reasonable for the currency to weaken to between 2,000 and 2,200 pesos per dollar as a result of government intervention and dollar-buying by the central bank. Key Latin American stock indexes and currencies at 2009 GMT: Stock Latest daily % YTD % indexes change change MSCI Emerging Markets 1030.03 -0.52 3.27 MSCI LatAm 3314.14 -1.47 5.08 Brazil Bovespa 52427.06 -1.74 1.79 Mexico IPC 41805.1 -0.08 -2.16 Chile IPSA 3888.16 -1.2 5.11 Chile IGPA 19058.49 -1.02 4.56 Argentina MerVal 7204.33 0.67 33.64 Colombia IGBC 13473.18 -1.22 3.07 Peru IGRA 15676.32 0.03 -0.49 Venezuela IBC 2189.78 2.03 -19.98 Currencies Latest daily % YTD % change change Brazil real 2.2162 -0.37 6.34 Mexico peso 12.9132 -0.06 0.90 Chile peso 552.8 -0.90 -4.83 Colombia peso 1921.02 -0.16 0.57 Peru sol 2.789 -0.04 0.14 Argentina peso (interbank) 8.0600 -0.03 -19.45 Argentina peso (parallel) 11.72 -3.50 -14.68 (Editing by Chizu Nomiyama and Chris Reese)
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