EMERGING MARKETS-Brazil stocks drop on growth, inflation, energy worries
SAO PAULO, Jan 26 (Reuters) - Brazil's stock market weakened on Monday after data released earlier in the day showed worsening market expectations for economic growth and inflation this year. Mexican and Chilean shares also declined, driving the broader MSCI Latin American stock index to its second straight loss. Brazil's Bovespa stock index posted the largest drop in the region, sinking about 1 percent. Economists hiked their forecasts for Brazil's 2015 inflation rate to 6.99 percent while slashing their economic growth estimates for the year to just 0.13 percent, a weekly central bank poll showed on Monday. Data from another survey released on Monday showed consumer confidence plunged in January to its lowest since the data series began in September 2005. The cloudy outlook contributed to investor jitters over potential energy rationing due to low reservoir levels at hydroelectric power plants. "The drop is very much linked to the fact that the market is already pricing in the fear of rationing and the potential effects on economic activity," said Raphael Figueredo, an analyst at Clear Corretora in Sao Paulo. Mining firm Vale SA fell about 4 percent, weighing most heavily on the broader index's losses. The company's long-term credit rating was downgraded by Standard and Poor's Rating Services on Friday on expectations that its financial risk profile will deteriorate in the next two years. The Brazilian real traded slightly weaker against the dollar as traders took profits following a 1.6 percent rise in the currency last week. Yields on Brazilian interest rate futures <0#DIJ:> rose across the curve, with investors pricing in expectations for higher interest rates to counter rising inflation. Elsewhere in Latin America, the Mexican peso gained slightly, while the Chilean and Colombian pesos were little-changed. Key Latin American stock indexes and currencies at 1515 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 987.36 -0.36 3.62 MSCI LatAm 2697.35 -0.89 -0.22 Brazil Bovespa 48337.89 -0.9 -3.34 Mexico IPC 42444.84 -0.48 -1.62 Chile IPSA 3830.35 -0.77 -0.54 Chile IGPA 18771.19 -0.65 -0.53 Argentina MerVal 8690.279 -0.54 1.30 Colombia IGBC 10810.88 0.15 -7.08 Peru IGRA 13487.31 0.02 -8.83 Venezuela IBC 3908.2 -0.96 1.28 Currencies daily % YTD % change change Latest Brazil real 2.5945 -0.25 2.43 Mexico peso 14.615 0.32 0.88 Chile peso 625.2 0.05 -3.01 Colombia peso 2384.19 -0.01 0.16 Peru sol 3.017 -0.07 -1.26 Argentina peso 8.6300 -0.06 -0.93 (interbank) Argentina peso 13.62 0.37 2.79 (parallel) (Reporting by Priscila Jordao; Writing by Asher Levine; Editing by Dan Grebler)
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