Latam stocks fall as eurozone worries weigh

Latin American stocks fell on Friday in thin trading that ended a disappointing week as European leaders failed to ease concerns about a widening sovereign debt crisis. The MSCI Latin American stock index slipped 1.4 percent to mark its tenth straight losing session and its worst weekly performance since late September.
"Everyone says there are going to be solutions but they never come," said Sergio Garcia, an analyst at Mexico City brokerage Value. "Investors think the world is a lot riskier today." Italy paid a euro-era high 6.5 percent to borrow over six months and its longer-term funding costs soared far above levels seen as sustainable for public finances.
Meanwhile another eurozone country, Belgium saw its credit rating downgraded to AA from AA-plus. Standard & Poor's said the country's inability to respond to economic pressures contributed to the downgrade. "The market smells blood," said Garcia. "Unfortunately the European problem has the capacity to complicate the future for world growth and capital flow."
The euro zone sovereign debt crisis has worried investors for two years and with ever-larger economies in the crosshairs, doubts over the future of the 17-nation monetary union have grown in recent months. Gonzalez said volatility would continue into the next week with downward pressure on the market unless European policymakers provide clear measures to stem the crisis.
Still, technical indicators suggested the MSCI could be due to recover, with the nine-day relative strength index suggesting stocks were now oversold. Light volumes in Latin American stocks trading, which depends heavily on foreign investors, aggravated volatility.
Brazil's benchmark Bovespa stock index declined 0.7 percent. The index slid 3.23 percent for the week. That index saw its fast and slow stochastics, technical momentum indicators, suggest stocks could move higher in coming sessions. Homebuilder PDG Realty gained 1.72 percent and consumer goods producer Hypermarcas added 3.34 percent.
The country's central bank is expected to cut its benchmark interest rate to 11 percent from 11.5 percent next week. Lower interest rates typically help retailer and construction stocks as investors see easier financing conditions. Mexico's IPC index slid 2.12 percent and posted a 4.71 percent loss for the week.
Telecom giant American Movil fell 3.28 percent and broadcaster Grupo Televisa retreated 3.13 percent. Chile's IPSA index dropped 1.46 percent, shedding 7.2 percent for the week. The IPSA's nine-session RSI also fell into oversold territory this week. Industrial conglomerate and copper giant Copec led losses, off 2.99 percent.