EMERGING MARKETS-Brazil stocks drop on China data; Petrobras earnings eyed

[yota691]

EMERGING MARKETS-Brazil stocks drop on China data; Petrobras earnings eyed

Tue Jan 27, 2015 10:27am EST

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SAO PAULO, Jan 27 (Reuters) - Brazil's benchmark Bovespastock index fell the most in over a week on Tuesdayfollowing disappointing economic data from top trade partnerChina.    The broader MSCI Latin American stock index slipped for the third straight day, while most of the region'scurrencies edged higher following a weak U.S. durable goodsnumber.    Data on Tuesday showed China's factory profit grew at itsweakest rate in two years in 2014 as economic growth slipped toa 24-year low.     China is a top market for Brazilian raw material exportssuch as iron-ore, soybeans and petroleum.    The data "ends up hurting commodities prices and so we'reseeing the raw materials sector pressuring (the index)," saidLuis Gustavo Pereira, an analyst with Guide Investimentos in SaoPaulo.    Shares of iron-ore miner Vale SA, which countsChina as its biggest customer, were down nearly 5 percent.    Preferred shares of state-run oil producer PetroleoBrasileiro SA, known as Petrobras, fell about 3percent. The company is expected to release unauditedthird-quarter results after market close on Tuesday.    Investors have been cautious on the outlook for Petrobrasgiven an ongoing corruption investigation at the firm. Localmedia estimate the company may take a charge of nearly $20billion in the third quarter in relation to the scandal.     In currency markets, the Brazilian real strengthenedabout 0.6 percent, erasing the previous two sessions' losses.The real has not closed stronger than 2.5735 per dollar sinceDec. 3.    Traders said the move came on the tail of weaker thanexpected durable goods data from the United States.     Disappointing data from the world's largest economy tends toboost riskier emerging market currencies because it reducesexpectations that U.S. interest rates could rise sooner than themarket had previously forecast.    One exception is Mexico, which saw its peso weakenslightly. Mexico is a key supplier of durable goods to itsnorthern neighbor, with many products manufactured in plantsnear the international border.     Key Latin American stock indexes and currencies at 1503 GMT:         Stock indexes                           daily %     YTD %                             Latest       change    change MSCI Emerging Markets          987.82     -0.09      3.39                                                   MSCI LatAm                     2690.1      -0.8     -0.59                                                   Brazil Bovespa               47633.98     -1.94     -4.75                                                   Mexico IPC                   42389.68     -0.81     -1.75                                                   Chile IPSA                    3820.38     -0.45     -0.79                                                   Chile IGPA                   18721.95     -0.38     -0.79                                                   Argentina MerVal             8770.119     -0.43      2.23                                                   Colombia IGBC                 10792.4     -0.42     -7.24                                                   Peru IGRA                    13595.13      0.12     -8.11                                                   Venezuela IBC                 3739.01      0.35     -3.10                                                                                                             Currencies                              daily %     YTD %                                          change    change                                Latest             Brazil real                    2.5726      0.63      3.30                                                   Mexico peso                   14.6083     -0.26      0.93                                                   Chile peso                      622.5      0.22     -2.59                                                   Colombia peso                 2383.39      0.26      0.19 Peru sol                        3.021     -0.13     -1.39                                                   Argentina peso                 8.6275      0.00     -0.90 (interbank)                                                                                         Argentina peso                  13.58      0.59      3.09 (parallel)                                                                                           (Reporting by Priscila Jordao; editing by Matthew Lewis)