Brazil stocks hit by weak data, Mexico dips

SAO PAULO: Stocks in Brazil fell on Friday, hurt by data that showed its economy grew less than expected late last year, while Mexican stocks dipped on concerns about the local impact from expected US government spending cuts.

Brazil's Bovespa index fell 0.94 percent to 56,883.99, cutting into a rebound from a three-week low that the index hit last week. The gauge closed up 0.33 percent in the week.

Data showed Latin America's biggest economy grew 0.9 percent in the last three months of 2012, just below estimates, adding to concerns that growth remains sluggish even as inflation is picking up speed.

"This number is not good. We have weak gross domestic product while we are having a problem of inflation. This is worrisome and bad for the market," said Clodoir Vieira, chief economist at brokerage Souza Barros in Sao Paulo.

Iron miner Vale lost 3.56 percent while homebuilder PDG Realty SA shed 4.98 percent.

Brazil's Bovespa has slumped 10 percent since the start of the year, hurt recently by expectations that the central bank may need to raise borrowing costs to fight inflation even as growth remains weak.

Mexico's IPC stock index dipped 0.28 percent to 43,995.72.

Bottler Femsa lost 2.08 percent while plastic pipe maker Mexichem lost 5.45 percent. The company earlier this week posted a loss for the fourth quarter.

Mexico, which sends nearly 80 percent of its exports to its northern neighbor, could be hurt by across-the-board US government spending cuts that were set to begin on Friday after lawmakers failed to reach a deal to avert the cuts.

Mexican stocks outperformed Brazil last year, hitting successive record highs, but equities in Latin America's  second-biggest economy have fallen a little more than 4 percent from a record high in January.

"I think we have seen the correction, especially in the big companies," said Jorge Gordillo, an analyst at CI Banco in Mexico City. "If US politics get more complicated, (stocks) could fall a bit more, but not so much," he said.

Chile's IPSA index rose 0.32 percent, mostly on a 3.14 percent gain in retailer Falabella.

Shares of rival Chilean retailer Cencosud closed flat after it said net profit in the fourth quarter rose 20.7 percent on better operational results and lower taxes.