BRASILIA: Latin American stocks fell for a third straight day on Thursday, tracking a slump in global markets, as concerns over a worldwide slowdown mounted following weak economic data in China and Europe.
The MSCI Latin American stock index slid 1.26 percent to its lowest in over a week, weighed down by miners, banks, real estate developers and commodity producers. Brazil's benchmark Bovespa stock index dropped for a third consecutive day, posting its biggest intraday decline in two weeks.
The HSBC Purchasing Managers' Index, a leading indicator of China's industrial activity, fell for a fifth straight month in March. Meanwhile, manufacturing in both Germany and France posted a sharper-than-expected contraction this month.
Latin American stocks are sensitive to global investment flows tied to investors' risk appetite. A deteriorating global economy has forced some investors to take money out of emerging markets and stash it into safe-haven gold and US dollar-denominated assets.
"Commodity prices continue to be the main concern with the slowdown of the Chinese economy dragging down prices," said Fabio Cardoso, a manager at Adinvest in Rio de Janeiro.
In Brazil, the Bovespa dropped 1.5 percent to 65,857.24 in early afternoon trading.
The losses were spearheaded by a 1.7 percent decline in shares of mining major Vale and state-run oil producer Petrobras, which lost 1.2 percent. The companies are Brazil's largest and exporters whose revenue depends on the health of the global economy.
Shares of top banks Itau Unibanco Holding, Brazil's largest private-sector lender, and No. 2 private bank Banco Bradesco also fell during the session.
After shedding 18 percent in 2011, the Bovespa has gained 16 percent so far this year thanks to a surge in investment inflows. Investors dropped emerging-market assets last year on fears that Europe's debt crisis could push the global economy back into recession.
Adinvest's Cardoso expects the Bovespa to eventually rise to 73,000 this year, near its all-time high.
In Mexico, the IPC index fell 0.24 percent. America Movil, the telecommunications company controlled by billionaire Carlos Slim, and mining giant Grupo Mexico fell 0.05 percent and 0.18 percent, respectively.
Chile's IPSA stock index dropped 0.64 percent. Shares of flagship airline LAN dropped 1.45 percent while construction firm Salfacorp was down more than 4 percent in the afternoon session.
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