EMERGING MARKETS-Brazil leads Latam stocks lower on oil, Petrobras woes
By Priscila Jordão SAO PAULO, Dec 12 (Reuters) - Brazilian stocks fell the most in Latin America while the real hit a 2005 low as global concern over plunging crude prices and the Chinese economy added to domestic woes related to a growing corruption scandal at state-run oil company Petrobras. Oil fell to fresh lows not seen since July 2009 as data showed China's factory output rose less than expected in November, increasing concerns about commodity-exporting countries with emerging economies. Brazil's benchmark Bovespa index sank nearly 3 percent while shares of Petroleo Brasileiro SA, as the oil company is formally known, slid 4.5 percent to a nine-year low of 10.34 reais. Petrobras has been hit by a perfect storm of falling oil prices, which raised doubts about the company's massive investment program, and a widening corruption scandal which resulted in criminal charges against executives of six of Brazil's largest engineering firms that had contracts with the oil firm. "Petrobras is suffering with the political scandal but its share price is also dropping with those of other oil companies," said Hersz Ferman, an economist with Elite brokerage in Brazil. "Oil's drop has been so sharp that it's increasing the credit risk of those companies." Shares of Companhia Siderurgica Nacional SA slumped 6.6 percent, the most among the components of the Bovespa index, after the steelmaker and a group of Asian partners agreed to move forward with a merger of their mining and logistics assets. Meanwhile, the Brazilian real lost 0.7 percent to 2.6643, its weakest since April 2005, as questions about the future of a central bank currency intervention program also weighed on the exchange rate. Central bank chief Alexandre Tombini has said the bank will make a decision by the end of the year on the future of the program, which supports the real by providing investors with currency hedges through the sale of forex swaps. Elsewhere in Latin America, Chilean stocks were only modestly lower as prices of copper, the country's main export product, rose on hopes that China would unleash more stimulus measures after the recent weak economic data. Mexican financial markets were closed for a local holiday. Key Latin American stock indexes and currencies at 1645 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging 938.58 -0.79 -5.65 Markets MSCI LatAm 2625.33 -2.25 -16.09 Brazil Bovespa 48507.45 -2.72 -5.82 Chile IPSA 3819.76 -0.15 3.26 Chile IGPA 18760.89 -0.14 2.93 Argentina MerVal 8357.649 -3.38 55.03 Colombia IGBC 10659.61 -1.53 -18.45 Peru IGRA 14829.16 -0.17 -5.87 Venezuela IBC 3863 0.24 41.16 Currencies daily % YTD % change change Latest Brazil real 2.6705 -0.92 -11.75 Mexico peso 14.7945 -0.11 -11.93 Chile peso 618.7 -0.48 -14.97 Colombia peso 2406.99 0.04 -19.73 Peru sol 2.961 0.20 -5.67 Argentina peso 8.5525 0.00 -24.09 (interbank) Argentina peso 12.73 -0.24 -21.45 (parallel) (Writing by Walter Brandimarte; Editing by Meredith Mazzilli)
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