Latam stocks dip, further gains eyed

Latin American stocks edged down on Friday, hurt by weaker-than-expected US growth data, and analysts said stocks could be vulnerable to some profit-taking after a big rally this month. The MSCI Latin American stock index fell 0.57 percent but the index still posted its fourth consecutive weekly gain with an around 1.4 percent advance.
Brazilian stocks are near their highest since last July as investors bet lower interest rates in Latin America's top economy will help corporate profits this year. Data showing weaker-than-expected fourth-quarter US growth weighed on stocks, with weak spending on capital goods hinting at slower expansion this year in the United States, the world's top economy and Mexico's biggest trading partner.
"With US GDP, we had some profit-taking," said Joao Luiz Piccioni, an analyst at Petra Asset in Brazil. Hopes that the European debt crisis is stabilising have helped push Latin American equities up sharply. The MSCI index has risen about 13 percent this month. US-based investors dumped the most money into bets on Latin American stocks since the beginning of last year, data from Lipper, a Thomson Reuters company, showed for the week ending January 25.
Brazil's benchmark Bovespa stock index dipped 0.08 percent from its highest since last July as oil giant Petrobras dipped 1 percent while exchange operator BM&FBovespa gained 1.87 percent. "Any downturn in the Bovespa is likely to be temporary," said Newton Rosa, who helps manage 23 billion reais ($13.14 billion) as chief economist at SulAmerica Investimentos in Sao Paulo. "Appetite for Brazilian stocks is still very strong as they are priced attractively and a lot of foreign funds are coming in."
Foreign investment flows have helped the Bovespa gain over 11 percent this year. "Flows to dedicated Emerging Market equity funds gained momentum this week as investors continued to allocate money to risky assets," Barclays Capital wrote in an investor note on Thursday.
Mexico's IPC index fell 0.15 percent, its first drop in three sessions. "In reality the market is moving laterally, there is not a sharp drop," Cervantes said. America Movil, the telecommunications group controlled by billionaire Carlos Slim, led the index lower, falling 0.52 percent. Chile's IPSA index rose 0.17 percent.