EMERGING MARKETS-Brazil stocks drop on looming energy crisis
SAO PAULO, Jan 23 (Reuters) - Brazilian stocks fell on Friday on fears of energy rationing that could hit the country's already ailing economy, while Latin American currencies weakened after an ECB-inspired rally. Brazil's benchmark Bovespa index underperformed regional stock markets to fall 1.4 percent as shares of companies such as miners, steelmakers, banks and utilities dropped. Brazil is under the threat of a severe energy crisis this year as a prolonged drought has depleted key reservoirs that supply water for hydroelectric power generation. Energy rationing is possible if water reservoirs fall below 10 percent of capacity, Brazil's Energy Minister Eduardo Braga said on Thursday. Reservoirs in Brazil's southwest and northwest regions now stand at around 17 percent of capacity. "There is widespread concern about the water and energy sectors, particularly after the energy minister said ... there may be energy rationing," said Luiz Roberto Monteiro, a trader with Renascenca brokerage in Brazil. "That would hurt the whole economy." Shares of Petroleo Brasileiro SA, or Petrobras, fell more than 1 percent amid talk that the state-run oil firm could release later on Friday its long-delayed third-quarter earnings. Investors expect the numbers may include large writedowns related to a massive corruption scandal at the company. Petrobras confirmed its board would hold a meeting on Friday but gave no details. Meanwhile, most Latin American currencies weakened as investors took profits from recent gains which had been inspired by the massive bond-buying program unveiled by the European Central Bank on Thursday. Key Latin American stock indexes and currencies at 1520 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging 991.79 0.84 2.85 Markets MSCI LatAm 2725.41 -1.54 1.48 Brazil Bovespa 48725.95 -1.45 -2.56 Mexico IPC 42928.2 -0.45 -0.50 Chile IPSA 3857.89 -0.2 0.18 Chile IGPA 18887.99 -0.16 0.09 Argentina MerVal 8718.88 -0.63 1.63 Colombia IGBC 10819.31 1.02 -7.01 Peru IGRA 13458 -0.42 -9.03 Venezuela IBC 3946.06 0 2.26 Currencies daily % YTD % change change Latest Brazil real 2.5838 -0.42 2.85 Mexico peso 14.631 0.02 0.77 Chile peso 626.1 -0.30 -3.15 Colombia peso 2386.39 -0.60 0.07 Peru sol 3.013 -0.33 -1.13 Argentina peso 8.6225 0.00 -0.84 (interbank) Argentina peso 13.63 0.51 2.71 (parallel) (Reporting by Priscila Jordao and Walter Brandimarte; Editing by James Dalgleish)
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