Stocks fall in Mexico, Brazil, Argentina, Chile

www.sfgate.com Friday, January 24, 2003

(01-24) 15:07 PST MEXICO CITY (AP) --

Mexican stocks closed lower Friday in line with U.S. declines as investors pulled out of the market ahead of expectations of an American attack on Iraq.

Mexico's key IPC index closed down 41.88 points or 0.7 percent to 6,012.56. Volume totaled a thin 45.6 million shares worth 585.2 million pesos.

The peso tapped a new historical closing low Friday on the war jitters. Mexico depends on U.S. consumers to purchase almost 90 percent of its exports. Attacks in the Middle East would likely further bruise the U.S. economy and consumer spending.

Equity decliners included brewer Grupo Modelo's C shares, which lost 2.5 percent to 23.78 pesos, and financial group BBVA-Bancomer's B shares, which dropped 1.6 percent to 8.11 pesos.

SAO PAULO, Brazil (AP) -- Brazil's main stocks index slumped to its lowest level since mid-December, as investors fled local equities on fears an American-led invasion of Iraq is drawing ever closer.

The Sao Paulo stock Exchange's leading Ibovespa index tumbled 3.3 percent to end at 10,783, its lowest close since Dec. 16.

The submission of a report on the state of Iraq's weaponry -- to be submitted by U.N. inspectors Monday -- could be a watershed moment in the standoff between Iraq and the United States.

Markets, worried that a war in Iraq could further feed risk aversion among equities investors, were anxious ahead of the report's release, traders said.

War in Iraq could also endanger Brazil's economy. The local currency has already depreciated significantly, falling Friday to its weakest level in more than a month. And an extended spike in crude prices could feed into inflation for net oil importers like Brazil.

Oil giant Petrobras, which could be hurt by the cost of importing more expensive crude, fell 4.9 percent to 45.11 reals.

Utilities Eletrobras and Eletropaulo also declined, shedding 5.9 percent and 3.4 percent to finish at 20.13 reals and 28.10 reals, respectively.

BUENOS AIRES, Argentina (AP) -- Argentine stocks closed down Friday, despite the decision by the International Monetary Fund's executive board to approve a debt rollover accord for the South American nation.

Thee IMF approved a deal that will roll over of some US$6.8 billion in debt payments the South American nation owes the international lender between January and August.

The deal could open the way to similar rollover accords for Argentina with the World Bank and the Inter-American Development Bank.

Analysts said the negative reaction of blue chips came because traders had already discounted the IMF accord at the turn of the year and were now looking to other themes.

In particular traders were concerned by the battle within the Peronist party over whether to hold a primary vote.

On Friday, a Peronist Congress organized by President Eduardo Duhalde decided to scrap the ballot, as the head of state wants.

But on Thursday, a federal judge ordered the Peronists to hold the primary, responding to a legal claim demanding primaries go ahead by Duhalde's party rival, former President Carlos Menem, who is seeking a third term in office.

The blue chip Merval Index closed down 10.34 points, or 1.81 percent, to 557.82 points. The broader General Index was down 355.95 points, or 1.31 percent, to 26,685.00 points. Volume was a modest ARS44.94 million.

Dragging the Merval down once again was energy giant Perez Companc. The share, which accounts for around one quarter of the market, was 4.16 percent lower at 2.30 pesos. The company continues to be negatively affected by the crisis in Venezuela, where the company produces much of its oil.

Carmaker Renault was one of the few blue chips heading higher. It closed up 1.61 percent to 1.26 pesos.

SANTIAGO, Chile (AP) -- Chilean share prices fell across the board Friday in response to the steep decline in U.S. share prices.

The blue-chip IPSA index ended down 1 percent at 993.97 points, from 1,003.95 points, and erasing all gains made in the three weeks of trading since the beginning of the year.

The narrower Inter-10 index of more liquid, internationally traded Chilean shares fell more steeply, dropping 1.4 percent to 100.26, setting the index back almost to where it stood Jan. 2. The broader-based IGPA index slipped to 4,985.22 from 5,000.97, backtracking 0.3 percent. Volume was low at 5.47 billion pesos.

Telecommunications company CTC lost 1.8 percent.