MEXICO CITY/SAO PAULO: Brazilian stocks ended basically unchanged on Monday while other Latin American shares fell as the European debt crisis and downbeat US factory data weighed on the market.
The MSCI Latin American stock index managed to end the session with a 0.07 percent advance to 3,322.50. The index, heavily weighted by Brazilian stocks, is trading near the lows of last October.
A drop in US factory goods in April coupled with a weak jobs report further dimmed hopes of an economic recovery. The United States is a major trading partner with Latin America and it buys nearly 80 percent of Mexican exports.
"The market is slow and probably will continue like that this week, with investors awaiting (Federal Reserve Chairman Ben) Bernanke's speech and hoping for a new quantitative easing announcement," said Flavio Barros, a manager at Grau Gestao de Ativos in Sao Paulo.
Analysts said Latin American stocks would also closely track developments in Europe as investors worry that the continent's debt troubles could trigger another global financial crisis.
Growing concerns about Europe's debt crisis have slammed riskier assets, such as emerging market stocks, in the last two months.
Brazil's benchmark Bovespa stock index firmed 0.03 percent after having fallen to its lowest level in nearly eight months in the previous week.
State-controlled oil company Petrobras rose 1.65 percent, contributing most to the index's gains, while steelmaker Gerdau added 2.67 percent.
PDG Realty, Brazil's biggest homebuilder, gained 1.83 percent after its board approved a plan raising capital to confront tighter credit markets and an economic slump.
"There are many stocks in the market that are getting cheap," said Sandro Fernandes, a broker with Geraldo Correa Corretora in Belo Horizonte, Brazil, who pointed to attractive values for stocks related to domestic consumption, such as phone companies, energy utilities and beverage producers.
Varejao said that although Brazil's economy grew a disappointing 0.2 percent in the first quarter, it is too early to write off Brazilian stocks or the continued interest of foreign investors.
"Growth here is looking to be about 2 to 2.5 percent, but you're comparing that with no growth in Europe," he said. "Things are bad, but there are much worse scenarios out there."
Mexico's IPC index declined for a fourth straight day, losing 0.33 percent to 37,059.78.
"The outlook for a possible rise is complicated, it is likely to continue to fall finding support around 35,000 to 35,500 points," said Faunel Fuentes, a technical analyst at brokerage Monex in Mexico City.
Lender Banorte fell 5.68 percent, driving losses in the IPC, while telecommunications firm America Movil gained 1.42 percent, supporting the index.
The disappointing US factory orders data weighed on shares in Mexico, which sends nearly 80 percent of its exports to its northern neighbor.
"(The data) hit the market at a bad time," said Luis Rodriguez, an analyst at brokerage Finamex in Guadalajara. "The market is in a delicate moment and reacting."
Rodriguez pointed to 37,000 points as a key a support for the index.
Industrial conglomerate Mexichem gained 1.77 percent after European Union regulators said on Monday they had cleared the company's takeover of Dutch pipe systems firm Wavin NV.
Chile's IPSA index sunk 1.72 percent to 4,206.68 in its worst one-day performance in six months. Ramon Lagos, equity manager at brokerage Penta, said much of the selling was motivated by profit taking. The index has remained largely rangebound between 4,200 and 4,300 points over the past two weeks.
Banco Santander Chile lost 2.62 percent, weighing most heavily on the index, while retailer Cencosud slid 2.57 percent.
Chile's largest industrial conglomerate, Empresas Copec lost 1.44 percent. The company's chief executive officer told Reuters on Monday the firm is worried about a slowdown in top trade partner China and the debt crisis in Europe, but that it is in a solid position and will push ahead with a $1.4 billion investment plan this year.
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