EMERGING MARKETS-Latam currencies down on China; Itau buoys Bovespa
SAO PAULO, Aug 5 (Reuters) - Brazil's benchmark stock index was little changed on Tuesday as strong earnings from top private-sector bank Itau Unibanco offset a drop in telecommunications shares following plans for a major acquisition in the sector. Meanwhile, Latin American currencies weakened across the board after disappointing data from China rang alarm bells over the economic outlook for a key purchaser of the region's commodity exports. Brazil's Bovespa stock index hovered near 56,600 points, nearly unchanged from the previous day's close. But shares of Itau Unibanco Holding SA touched an all-time high after the bank beat estimates to post a record profit in the second quarter. Telecommunications firms dropped sharply, however, as a bid by Spain's Telefonica for Vivendi's Brazilian broadband operator GVT caused investors to reweigh the chances for consolidation between other players in Brazil's mobile market. Investor bets on a breakup of TIM Participações SA have supported the sector's stocks in recent months. The broader MSCI Latin American stock index dipped slightly, weighed down by a drop in Mexican telecommunications firm America Movil, which operates under the Claro brand in Brazil. Latin American currencies took a hit after data showed growth in China's services sector slowed in July to its lowest level in nearly nine years. China is Brazil's top trading partner and a key purchaser of Latin American raw materials such as iron ore, soybeans, copper and petroleum. Brazil's real weakened to about 2.275 per U.S. dollar, a level it has not closed above in over two months. Chile's peso returned the previous session's gains, further weakened by lower prices for copper, the country's main export. The Colombian and Mexican pesos both dropped about 0.5 percent against the dollar. Yields paid on Brazil's interest-rate futures contracts <0#DIJ:>, particularly the longest-dated ones, rose sharply as a weakening real and estimates that electricity costs will jump higher than expected in 2015 fueled inflation fears. Brazilian central bank chief Alexandre Tombini reiterated on Tuesday that the bank is not considering reducing its benchmark Selic interest rate in the near future despite the economic slowdown. Key Latin American stock indexes and currencies at 1630 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 1,063.32 -0.56 6.64 MSCI LatAm 3,435.17 -0.65 8.03 Brazil Bovespa 56,630.67 0.03 9.95 Mexico IPC 44,533.37 -0.14 4.23 Chile IPSA 3,939.76 0.12 6.50 Chile IGPA 19,202.32 0.13 5.35 Argentina MerVal 8,159.49 -1.94 51.35 Colombia IGBC 14,256.82 0.49 9.07 Peru IGRA 16,797.32 -0.79 6.62 Venezuela IBC 2,182.53 0.4 -20.25 Currencies Daily YTD pct pct change Latest change Brazil real 2.2773 -0.72 3.49 Mexico peso 13.2692 -0.56 -1.80 Chile peso 576.8 -0.94 -8.79 Colombia peso 1,892.04 -0.48 2.11 Peru sol 2.809 -0.11 -0.57 Argentina peso 8.2700 -0.09 -21.49 (interbank) Argentina peso 12.68 0.32 -21.14 (parallel) (Reporting by Asher Levine, editing by G Crosse)
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