EMERGING MARKETS-Latam stocks fall on Eurogroup chief comments
* Cyprus secures deal to avert banking crisis * Eurogroup head says deal represents new template * Brazil Bovespa falls 0.34 pct, Mexico IPC little-changed By Asher Levine SAO PAULO, March 25 (Reuters) - Latin American stocks fell on Monday, following early gains, after a key European policymaker said a deal struck over the weekend to save Cyprus' banking sector from collapse could serve as a template for future rescues in the currency bloc. Because big depositors will lose money on the Cyprus deal, the concern is that depositors in other countries could be similarly affected should their banking sectors require a rescue. Brazil's Bovespa index fell to its lowest point in eight months while Mexico's IPC index remained flat. Shares tracked global markets higher in early trading after Cyprus clinched bailout funds from international lenders on Sunday in exchange for shutting down its second-largest bank and inflicting heavy losses on uninsured depositors. Those gains disappeared later in the session after Jeroen Dijsselbloem, head of the Eurogroup of euro zone finance ministers, said the deal represented a new template for resolving euro zone banking problems and that other countries may have to restructure their banking sectors. Brazil's benchmark Bovespa stock index fell for the fifth straight day, losing 0.34 percent to 55,054.89. "The markets abroad dropped and we went along for the ride," said Ariovaldo Santos, a broker with H.Commcor in Sao Paulo. "We also broke a key resistance level at 55,100 points, so we are seeing that weigh heavily." Investor appetite for riskier investments such as Latin American equities had been limited in recent sessions due to uncertainty over the future of Cyprus's banking system, which was hit hard by its exposure to heavily-discounted Greek debt. The Bovespa is down over 4 percent in March and on track for its third straight monthly loss as foreign investors slashed their exposure to Brazilian stocks by about 900 million reais in the five sessions ending March 21. "The Cyprus deal alone wasn't enough to really encourage investors," said Clodoir Vieira, chief economist at brokerage Souza Barros in Sao Paulo. "Markets abroad are breaking records and we are stuck," Vieira said, citing ongoing concerns over government meddling in the private sector and the need to reassure global investors that Brazil is a safe and profitable place to put their money. Iron ore mining firm Vale SA fell 1.6 percent, contributing most to the index's declines, while drugmaker Hypermarcas SA slipped 1.8 percent. Common shares of telecommunications firm Grupo Oi SA fell 3.9 percent after analysts at UBS Securities trimmed their target price on the stock, citing skepticism over Oi's "ability to take market share and grow earnings." Mexico's IPC index edged slightly higher, adding 0.07 percent to 42,716.85. Shares of lender Grupo Financiero Banorte rose 1 percent, offsetting a 1 percent loss by mining firm Grupo Mexico. Data on Monday showed Mexico's economic activity rebounded in January, helped along by robust consumer spending. Chile's IPSA index slipped 0.48 percent to 4,429.67 as shares of conglomerate AntarChile fell 2 percent. Latin America's key stock indexes at 1554 GMT: Stock indexes daily % YTD % Latest change change MSCI LatAm 3,728.34 -0.17 -1.66 Brazil Bovespa 55,054.89 -0.34 -9.68 Mexico IPC 42,716.85 0.07 -2.26 Chile IPSA 4,429.67 -0.48 2.98 Chile IGPA 21,691.71 -0.39 2.95 Argentina MerVal 3,398.42 -0.92 19.06 Colombia IGBC 13,983.96 0.42 -4.97 Peru IGRA 19,968.10 -0.12 -3.21 Venezuela IBC 625,009.88 -0.65 32.58
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