EMERGING MARKETS-Bank shares weigh on Brazil's Bovespa; Latam currencies flat
SAO PAULO, July 16 (Reuters) - Brazil's benchmark Bovespa stock index fell on Wednesday as a decline in bank shares offset gains in mining firm Vale and telecommunications company Grupo Oi. Moves in the rest of Latin America's stock indexes and currencies were muted, while Chile's markets were closed for a local holiday. The Bovespa erased early gains, capping a four-session rally that led the index to its highest close since late October in the previous session. "With the gains over the past few days it's normal to see some settling," said Silvio Campos Neto, an economist with Tendencias in Sao Paulo. Losses were concentrated in shares of Itau Unibanco Holding SA and Banco Bradesco SA, two of Brazil's biggest banks, after Morgan Stanley analysts cautioned that earnings could "decelerate significantly" at the firms. Encouraging economic data from China supported the index, however, by boosting shares of mining firm Vale SA, which counts the Asian giant as its biggest customer. Shares of telecommunications firm Grupo Oi SA jumped the most in six months after the company renegotiated the terms of a merger with Portugal Telecom to avoid the credit risk from a debt investment made by the latter. Brazil's currency, the real fluctuated near unchanged territory, while yields on Brazilian interest rate futures <0#DIJ:> edged lower on thin volume. Brazil's central bank will make its interest rate announcement after market closes. All 60 economists surveyed in a Reuters poll last week predicted the bank will hold rates at the current 11 percent. Chile's central bank cut its benchmark interest rate on Tuesday for the first time since March as worries about a slowing economy outweighed concerns over above-target inflation. Chile's markets are expected to reopen on Thursday. Key Latin American stock indexes and currencies at 1624 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1066.34 n/a 6.35 MSCI LatAm 3,467.31 -0.22 8.56 Brazil Bovespa 55,645.85 -0.59 8.04 Mexico IPC 43,917.33 -0.1 2.79 Chile IPSA 3,964.22 -0.01 7.16 Chile IGPA 19,285.47 -0.04 5.81 Argentina MerVal 8,547.79 -0.89 58.56 Colombia IGBC 13,902.61 0.85 6.36 Peru IGRA 16,909.32 0.28 7.34 Venezuela IBC 2,117.98 0.69 -22.60 Currencies daily % YTD % change change Latest Brazil real 2.2229 -0.13 6.02 Mexico peso 12.9360 0.07 0.73 Chile peso 557.4000 n/a -5.62 Colombia peso 1868.0000 0.04 3.43 Peru sol 2.7810 n/a 0.43 Argentina peso 8.1500 0.03 -20.34 (interbank) Argentina peso (parallel) 12.2000 0.00 -18.03 (Editing by Bernadette Baum)
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