(Updates political situation in Brazil, closing prices)
SAO PAULO, May 9 (Reuters) - Brazilian stocks and the real closed lower on Monday after a volatile session, on uncertainty about impeachment proceedings investors had counted on to remove leftist President Dilma Rousseff from office.
The country’s benchmark Bovespa stock index closed down 1.41 percent while the broader MSCI Latin American stock index was down 1.43 percent, also hurt by weaker commodity prices following unfavorable economic data in China.
The Brazilian currency, the real , weakened as much as 5 percent during the day after the acting lower house speaker in Brazil’s Congress annulled an April 17 vote that had been overwhelmingly in favor of impeaching Rousseff.
Later in the day, though, Senate President Renan Calheiros pledged to push forward with the impeachment process in the upper house, meaning the country’s Supreme Court will likely have to decide the way forward.
The real ended down 0.63 percent against the dollar, but may well rise on Tuesday due to Calheiros’ announcement.
Markets rose in recent weeks on expectations Vice President Michel Temer would take power temporarily after a Senate vote, expected on Wednesday, and put austerity measures in place to tighten public spending.
The impeachment proceedings are focused on Rousseff’s alleged manipulation of public accounts and not a sweeping kickback scandal involving state oil company Petroleo Brasileiro SA, commonly known as Petrobras.
The process has been criticized because it was started by Eduardo Cunha, the former lower house speaker who was removed last week due to pending charges he took bribes.
Waldir Maranhao, who broke with his center-right Progressive Party and voted against Rousseff’s impeachment last month, took over as acting speaker last week. He said there were procedural flaws in the lower house vote.
“My sense is that ultimately at some point Dilma is going to be removed from government,” said Neil Shearing, Chief Emerging Markets Economist at Capital Economics in New York.
“I think it’s going to be far more traumatic and turbulent than markets have been pricing in and still are pricing in.”
Central bank director Altamir Lopes said the market volatility was normal given the news, while speaking at a public event in the northern city of Belem.
Shares of stocks tied to commodities led losses on the Bovespa, following commodities markets lower. Shares of state-run oil firm Petrobras shed about 6 percent. Mining company Vale tumbled nearly 9 percent.
Brazilian meatpacker JBS fell over 4 percent, also hurt by reports in newspaper O Globo that witnesses in a corruption scandal had testified the company made illegal campaign donations to Rousseff’s campaign, allegations the company denied.
Elsewhere in Latin America, Mexico’s peso weakened 1.8 percent while Chile’s peso was down 1.53 percent. (Reporting by Caroline Stauffer in Sao Paulo, Dion Rabouin in New York and Alonso Soto in Belem; editing by G Crosse and David Gregorio)