EMERGING MARKETS-Brazil's Vale advances on China rates; currencies slide
SAO PAULO, May 11 (Reuters) - Shares of Brazilian iron-ore producer Vale SA led the Bovespa stock index higher on Monday after top customer China announced it would lower interest rates to boost economic growth. Brazil's real , however, weakened alongside other Latin American currencies on concern over Greek debt talks. China cut interest rates for the third time in six months on Sunday to help stoke a domestic economy that is headed for its worst year in a quarter of a century. China is Brazil's top trading partner and a major purchaser of Latin American commodity exports such as copper, soybean, petroleum and iron ore. Shares of Vale, which counts China as its No. 1 customer, rose over 4 percent, ending a three-day slump. Brazilian steelmakers also advanced, though consumer goods companies retreated. A weekly central bank poll released before market open on Monday showed analysts expect the Brazilian economy to contract 1.2 percent this year, worse than the 1.18 percent contraction forecast a week earlier. The Brazilian real nearly erased Friday's gains against the dollar, weakening over 1 percent and crossing back above the 3 per dollar level. Traders said the real, like most Latin American currencies, was responding to global dollar strength sparked by concerns over the outcome of Greek debt negotiations. Greece, which must repay a 750 million euro ($837.30 million) loan to the International Monetary Fund on Tuesday, faces the risk of defaulting on debt repayments and being forced out of the euro zone. Investors often sell riskier assets in favor of the safe-haven dollar in times of concern or uncertainty over global economic health. ($1 = 0.8957 euros) Key Latin American stock indexes and currencies at 1451 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1036.12 0.11 8.22 MSCI LatAm 2733.79 -0.42 0.64 Brazil Bovespa 57416.13 0.47 14.82 Mexico IPC 45020.25 -0.23 4.34 Chile IPSA 4125.58 0.48 7.13 Chile IGPA 19983.05 0.49 5.90 Argentina MerVal 12102.27 -0.84 41.07 Colombia IGBC 10669.27 0.32 -8.30 Peru IGRA -- -- -- Venezuela IBC 5692 -0.07 108.00 Currencies daily % YTD % change change Latest Brazil real 3.0178 -1.22 -21.90 Mexico peso 15.2189 -0.67 -14.38 Chile peso 604.25 0.00 -12.93 Colombia peso 2374.7 -0.84 -18.64 Peru sol 3.1531 -0.25 -11.42 Argentina peso 8.9250 0.00 -27.25 (interbank) Argentina peso 12.52 0.40 -20.13 (parallel) (Reporting by Asher Levine Editing by W Simon)
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