SAO PAULO: Latin American stocks fell on Tuesday after euro zone finance ministers rejected an offer by private creditors to restructure their Greek debt, drawing Greece closer to a disorderly default that could hamper global economic growth.
The MSCI Latin American stock index snapped a six-day rally, falling 1.24 percent to 3,974.02, its biggest intraday drop in over two weeks.
Shares fell after euro zone finance ministers said late Monday they could not accept the 4 percent coupon demanded by private creditors on new Greek debt issued in exchange for writing down current debt by 50 percent and sent it back for further negotiations.
Failure to achieve an agreement could lead Greece to a disorderly default when 14.5 billion euros of bond redemptions fall due in March.
"There's a feeling that a disorderly default could contaminate the markets and the financial system that would lead to a shortfall of liquidity, which could hurt some channels in the Brazilian economy such as credit and foreign trade," said Flavio Serrano, a senior economist with BES Investimentos in Sao Paulo.
"We still don't have a definitive solution to the problem, so the market took advantage of that as a justification to take some profits."
Brazil's benchmark Bovespa stock index fell 0.79 percent to 61,893.12, snapping a six-day rally that saw the index rise over 4 percent.
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