MEXICO CITY, Feb 25 (Reuters) - Latin American financial markets fell on Wednesday, dragged down by losses in Brazil as the country’s currency tumbled and shares of state-run oil firm Petrobras sank after Moody’s cut its investment grade to junk.
Shares in Petrobras fell more than 6 percent after Moody’s Investors Service stripped the company of its investment-grade rating late on Tuesday and said it could cut the country’s state-run oil company again due to an ongoing corruption scandal and liquidity pressures.
Reuters reported on Wednesday that Petrobras has hired JPMorgan Chase & Co to handle $3 billion in planned asset sales this year in a bid to cut its debt levels.
The losses helped pull down Brazil’s benchmark Bovespa index by 0.68 percent.
Brazil’s real shed nearly 1.3 percent to bid at 2.8692 per dollar. The Petrobras downgrade further eroded the attractiveness of assets in Brazil, which is struggling with an economic slowdown, analysts said.
“The downgrade should intensify the recent turmoil in the Brazilian financial markets,” wrote analysts at BBVA.
Brazil currently has no plans to capitalize Petrobras despite market fears the state-run oil company could need fresh capital, two government officials told Reuters on Wednesday.
Mexico’s benchmark IPC index fell 0.3 percent, slipping off its highest level in nearly three months while Mexico’s peso was little changed, down 0.1 percent to 14.9350 per dollar.
Shares in Mexico’s Coca-Cola Femsa, the biggest Coke bottler in Latin America, fell 1.4 percent after it reported flat fourth-quarter earnings, hurt by currency weakness in Venezuela and Mexico.
Reporting by Michael O'Boyle in Mexico City and Bruno Federowski in Sao Paulo; Editing by Diane Craft