EMERGING MARKETS-Brazil stocks drop on China data; Petrobras earnings eyed
SAO PAULO, Jan 27 (Reuters) - Brazil's benchmark Bovespa stock index fell the most in over a week on Tuesday following disappointing economic data from top trade partner China. The broader MSCI Latin American stock index slipped for the third straight day, while most of the region's currencies edged higher following a weak U.S. durable goods number. Data on Tuesday showed China's factory profit grew at its weakest rate in two years in 2014 as economic growth slipped to a 24-year low. China is a top market for Brazilian raw material exports such as iron-ore, soybeans and petroleum. The data "ends up hurting commodities prices and so we're seeing the raw materials sector pressuring (the index)," said Luis Gustavo Pereira, an analyst with Guide Investimentos in Sao Paulo. Shares of iron-ore miner Vale SA, which counts China as its biggest customer, were down nearly 5 percent. Preferred shares of state-run oil producer Petroleo Brasileiro SA, known as Petrobras, fell about 3 percent. The company is expected to release unaudited third-quarter results after market close on Tuesday. Investors have been cautious on the outlook for Petrobras given an ongoing corruption investigation at the firm. Local media estimate the company may take a charge of nearly $20 billion in the third quarter in relation to the scandal. In currency markets, the Brazilian real strengthened about 0.6 percent, erasing the previous two sessions' losses. The real has not closed stronger than 2.5735 per dollar since Dec. 3. Traders said the move came on the tail of weaker than expected durable goods data from the United States. Disappointing data from the world's largest economy tends to boost riskier emerging market currencies because it reduces expectations that U.S. interest rates could rise sooner than the market had previously forecast. One exception is Mexico, which saw its peso weaken slightly. Mexico is a key supplier of durable goods to its northern neighbor, with many products manufactured in plants near the international border. Key Latin American stock indexes and currencies at 1503 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 987.82 -0.09 3.39 MSCI LatAm 2690.1 -0.8 -0.59 Brazil Bovespa 47633.98 -1.94 -4.75 Mexico IPC 42389.68 -0.81 -1.75 Chile IPSA 3820.38 -0.45 -0.79 Chile IGPA 18721.95 -0.38 -0.79 Argentina MerVal 8770.119 -0.43 2.23 Colombia IGBC 10792.4 -0.42 -7.24 Peru IGRA 13595.13 0.12 -8.11 Venezuela IBC 3739.01 0.35 -3.10 Currencies daily % YTD % change change Latest Brazil real 2.5726 0.63 3.30 Mexico peso 14.6083 -0.26 0.93 Chile peso 622.5 0.22 -2.59 Colombia peso 2383.39 0.26 0.19 Peru sol 3.021 -0.13 -1.39 Argentina peso 8.6275 0.00 -0.90 (interbank) Argentina peso 13.58 0.59 3.09 (parallel) (Reporting by Priscila Jordao; editing by Matthew Lewis)
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