EMERGING MARKETS-Profit-taking hits Latam; Brazil off after data
RIO DE JANEIRO, April 9 (Reuters) - Latin American markets dropped on Wednesday as investors pocketed recent gains, while Brazilian stocks were further pressured by higher-than-expected inflation data. MSCI's benchmark index for Latin American stocks retreated 1.1 percent in a second consecutive down session. It gained about 15 percent from mid-March through Monday as risk appetite increased globally. Investors adopted a cautious tone ahead of the release of minutes of the U.S. Federal Reserve's latest monetary policy meeting. The document, due at 1600 GMT, could offer hints about the timing of an expected interest rate hike by the U.S. central bank, following mixed signals from several Fed speakers. Brazil's Bovespa index fell 1.1 percent after the country's IPCA consumer inflation index in March hit its fastest pace in 11 years for that month, suggesting the central bank may need to keep raising interest rates for a little longer. "Higher inflation shows that the macroeconomic scenario remains very challenging and that all the excitement we've recently seen in the stock market may have had technical reasons," said Joao Pedro Brugger, an equities analyst with Leme Investimentos, a brokerage in Florianopolis, Brazil. "The recent performance of the Bovespa index appears a little exaggerated as the economic fundamentals have not changed," he added. The Bovespa has gained more than 15 percent in the past three weeks as investors snatched stocks considered cheap on hopes that Brazil's next president would curb public spending to fight inflation and reduce government intervention in the economy. Although President Dilma Rousseff remained on track to win re-election on Oct. 5, investors believed she could be forced to change her policies in a second term as Brazilians grow increasingly worried about inflation. In foreign exchange markets, the Brazilian real weakened 0.4 percent after the currency pushed past the 2.2 per dollar mark for the first time since October during three straight winning sessions. "I don't believe the real has the strength to gain further. It seems that 2.2 per dollar is a very important resistance level," said Mario Battistel, a manager at the currency desk of Fair brokerage in Sao Paulo. Chile's peso slid 0.75 percent, leading losses among Latin American currencies, as the price of copper, the country's main export product, fell about 1 percent. (GRAPHICS: Emerging market FX 2014 performance: link.reuters.com/jus35t MSCI emerging index 2014 performance: link.reuters.com/weh36s) Key Latin American stock indexes and currencies at 1555 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging 1014.24 0.27 0.88 Markets MSCI LatAm 3255.92 -1.27 3.03 Brazil Bovespa 51064.54 -1.09 -0.86 Mexico IPC 40865.33 -0.1 -4.36 Chile IPSA 3843.93 0.57 3.91 Chile IGPA 18843.16 0.47 3.38 Argentina MerVal 6440.5 -0.72 19.47 Colombia IGBC 13747.15 -0.45 5.17 Peru IGRA 14467.31 -0.2 -8.17 Venezuela IBC 2524.09 0.03 -7.76 Currencies daily % YTD % Latest change change Brazil real 2.2162 -0.64 6.34 Mexico peso 13.0478 -0.02 -0.14 Chile peso 549.4 -0.76 -4.24 Colombia peso 1932.64 0.00 -0.03 Peru sol 2.796 0.43 -0.11 Argentina peso 8.0000 0.03 -18.84 (interbank) Argentina peso 10.24 0.98 -2.34 (parallel) (Reporting by Walter Brandimarte, Priscila Jordao and Bruno Federowski; Editing by Jeffrey Benkoe)
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