SAO PAULO: Brazilian stocks fell broadly on Monday, erasing the previous session's gains as oil companies weighed, including state-run giant Petrobras and rival oil producer OGX. Mexico's IPC index was little changed, while Chile's bourse rose for the first session in six.
Brazil's Bovespa index dropped 0.7 percent to 54,663.50, continuing a pattern of alternating declines and gains in the index seen over the past week.
"55,000 points is an important level," said Alvaro Bandeira, a partner at Orama Investimentos in Rio de Janeiro, citing the potential for stop-loss orders if stocks continue to slip. "If we go much further below we can expect the market to fall towards 52,000."
"After the bargain-hunting on Friday we are back to a weak market today, reinforced by the fall in the US (stock) markets and with little on the economic agenda," he added.
Shares of oil producer OGX Petroleo e Gas Participacoes SA , controlled by Brazilian billionaire Eike Batista, fell 4 percent, contributing most to the index's decline, while state-run rival Petroleo Brasileiro SA, known as Petrobras, dropped 0.67 percent.
OGX shares are down 62 percent this year as short positions spiked, traders said, based on information from BM&FBovespa SA's CBLC clearinghouse. Equity analysts also cited the potential for share dilution should Batista need to bolster the troubled company's capital position.
"I don't see a turnaround for OGX in the short-term," said Fabio Goncalves, a trader with Banrisul in Porto Alegre, Brazil. "Their cash position is weak and most people think they will have to raise funds."
Shares of airline Gol Linhas A?reas Inteligentes SA jumped 3.5 percent after the company on Monday named a major investor for the initial public offering of its Smiles SA customer loyalty unit.
Mexico's IPC index was little changed from Friday's closing levels as a 0.6 percent loss in telecommunications firm America Movil offset a 2.6 percent rise in lender Grupo Financiero Banorte.
Banorte shares had fallen nearly 5 percent on Friday after Bloomberg News reported Mexico's fourth largest bank is planning to raise about $2 billion through a share offering this year. Banorte later disputed that account in a statement filed with the Mexican stock exchange on Friday.
Chile's IPSA index snapped a five-day slide, rising 0.56 percent to 4,294.77 as shares of retailer Falabella gained 1.8 percent.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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