SAO PAULO: Brazilian stocks fell to an almost 20-month low on Friday after Standard & Poor's warned investors on the country's deteriorating fiscal fundamentals and slow economic growth.
Standard & Poor's revised its outlook on long-term ratings for Brazil's sovereign debt to negative from stable on Thursday, giving equity investors pause.
A weak domestic economy and persistent inflation pressure has soured many foreign investors on local equities in recent months, reflected in a more than 15 percent drop in the benchmark Bovespa stock index so far this year.
Friday's level was the lowest since October, 2011.
"The S&P decision is definitely negative though in some ways it just reflected what everyone already knows," said Marcello Paixao, a partner with Principia Capital Management in Sao Paulo.
Paixao added that a widespread perception that the US Federal Reserve will slow its monetary stimulus program weighed on the market in recent days, mostly due to the outlook for fewer available funds destined for emerging markets.
* Brazil's benchmark Bovespa stock index fell 2.39 percent to 51,618.63, notching its worst eight day slump in a year.
* Shares of oil producers led declines, with state-run oil company Petroleo Brasileiro SA, known as Petrobras, down 3.19 percent and rival OGX Petroleo e Gas Participacoes SA falling 8.82 percent.
* Shares of homebuilder Gafisa SA jumped in opening trade after the company said it agreed to sell a 70 percent stake of its high-end Alphaville unit for 1.4 billion reais ($654 million). The broader market selloff and profit-taking led the shares to reverse gains later in the session, however, closing down 10.3 percent.
* Mexico's IPC index fell 0.85 percent to 40,232.68, led by losses in Grupo Financiero Banorte and Mexican miner and infrastructure company Grupo Mexico , down 3.56 and 2.87 percent respectively.
* Chile's IPSA index slipped for the third straight day, losing 1.19 percent to 4,119.25 as shares of retailer Cencosud fell 2.69 percent.
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