MEXICO CITY: Mexican stocks fell to a four-week low on Thursday after data showed signs of a slower economic outlook for the United States, Mexico's top trading partner, while Brazil bounced back from a nine-month low.
Mexico's IPC stock index shed 0.35 percent to 42,460.21 points. It sank below its 200-day simple moving average for the first time since late 2011 but pared losses to close above the measure, currently at around 42,344.
Chart watchers said the technical outlook was poor for Mexican stocks, with the MACD momentum indicator flashing a "sell" signal on Thursday. Moreover, the IPC's 50-day simple moving average crossed below the index's 100-day average in a sign that may also bode further losses.
Analysts said the market was unlikely to get much support from upcoming earnings reports expected in the United States and Mexico.
"Overall, the earnings reports in the United States are seen being modest while in our country we are going to see some reports that will be weak," said Carlo Gonzalez, head of analysis at brokerage Monex in Mexico City.
Weaker US data could also continue to weigh on sentiment. On Thursday, data showed a gauge of future economic activity fell in March for the first time in seven months and the pace of factory activity growth in the mid-Atlantic region unexpectedly slowed in April.
Mexico's IPC has now slumped about 8 percent from a record high in late January.
Shares in miner Grupo Mexico fell 4.2 percent. The stock has tumbled nearly 18 percent in the last five sessions, its worst five-day run in four years.
The commodities-heavy Bovespa index rose 0.54 percent to 53,165.91, according to preliminary closing data, as it climbed back from its lowest close since late last July.
Brazilian stocks have seen the longest streak of losses in two decades, leaving share prices ripe for a rebound, but HSBC Securities said investors are still unwilling to jump in due to concerns about rising inflation, state interference in some sectors and weak economic growth.
A 4.19 percent gain in shares of state-run oil firm Petrobras on Thursday helped offset losses in Brazil in shares of mining giant Vale SA and banks.
Brazil's Vale, the world's largest iron ore producer, slipped 1.74 percent after reporting a 3.5 percent drop in iron ore output in the first quarter on Wednesday.
Banking shares fell after Brazil's central bank on Wednesday raised interest rates less than traders predicted.
State-controlled Banco do Brasil SA, Brazil's largest bank, dropped 2.79 percent, and Itau Unibanco Holding SA fell 3.43 percent.
Policymakers raised the benchmark Selic overnight interest rate on Wednesday evening by 25 basis points to 7.50 percent. It was the first increase since July 2011, but many economists said the move would not be enough to curb inflation.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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