EMERGING MARKETS-LatAm mostly weaker on US market angst

Mon Dec 15, 2008 5:25pm EST
By Walter Brandimarte
SAO PAULO, Dec 15 (Reuters) - Latin American financial markets ended mostly weaker on Monday as concerns about upcoming quarterly results from banks and uncertainty about the fate of American automakers weighed on investor sentiment.
The MSCI Latin America stock index .MILA00000PUS declined 1.99 percent while Brazil's benchmark Bovespa index .BVSP lost 2.68 percent and Mexico's IPC .MXX fell 1.67 percent.
"We had more bad news from banks" in the United States, said Alexandre Caldas, head of stock trading with Paraty Investimentos in Rio de Janeiro. "Here, retail stocks fell on negative economic forecasts for 2009," he added.In the opposite direction, Argentina's MerVal rose 1.53 percent, boosted by selective buying of shares tied to global commodity prices. It was the ninth consecutive session of gains of the index.
On the foreign exchange market, the Brazilian real BRBY weakened 0.92 percent to 2.388 per dollar while the Mexican peso posted losses of 0.92 percent, closing at 13.3155 per greenback.
But the Chilean peso rose 1.78 percent to close at a one-month high of 640.20 per dollar, as the greenback weakened on global markets.
Prices of sovereign global bonds fell, led by Ecuador, Argentina and Venezuela.
After Ecuador's President Rafael Correa announced the country would default on its external debt last week, investors became more averse to the default risk of Argentina and Venezuela, which have a more fragile fiscal position.
Ecuador's global 2015 bonds were bid down 3 points in price to 30.750 while Venezuela's global 2027 bonds lost 1.75 points in price to bid 54.375.
Yield spreads between emerging market bonds and U.S. Treasuries, a key gauge of risk aversion, widened 2 basis points to 742 basis points, according to the benchmark JP Morgan EMBI+ index 11EMJ.
(Additional reporting by Aluisio Alves in Sao Paulo; Editing by Diane Craft)