SAO PAULO: Brazil's stock index fell on Monday as heavily weighted oil firm OGX Petroleo e Gas Participacoes SA plummeted following an announcement that it is shelving development at some of its oil fields.
Mexico's IPC index gained, while Chile's bourse registered a modest drop.
Seeking to ease investors' concerns that it may collapse, OGX, the oil company controlled by Brazilian billionaire Eike Batista, announced on Monday that it would suspend development at the Tubarão Tigre, Tubarão Gato and Tubarão Areia offshore oil fields. The three wells at a fourth field, Tubarão Azul, could stop producing oil as soon as next year, OGX said, adding that it will not invest any more in the area.
Shares of the Rio de Janeiro-based company dropped 26 percent to 0.65 reais, their biggest one-day decline on record.
"This is very bad news," said Luis Gustavo Pereira, a strategist at Futura Corretora in Sao Paulo. "Things were not looking good for OGX in the coming year - now they look even more critical."
Brazil's benchmark Bovespa stock index fell 0.75 percent to 47,102.83.
Shares of mining giant Vale SA lent support to the index, rising 0.9 percent, while shares of steel producer Gerdau SA rose 5.3 percent.
Both stocks gained on a rosier outlook for commodities prices, according to Luis Roberto Monteiro, an analyst at brokerage firm Renascenca in Sao Paulo. Commodities jumped 0.75 percent, their biggest gain in nearly a month, according to the Reuters/Jefferies CRB index of the 19 most-traded agricultural, energy and metals commodities.
Despite the individual gains, the Bovespa is looking forward to a volatile week, according to Pereira.
Mexico's IPC index began the fifth day of a rally, its longest in nearly three months.
Retail giant Wal-Mart de Mexico rose 1.2 percent, contributing most to the index's gains.
Chile's IPSA index capped a four-session rally as retail company Falabella fell 1.8 percent.
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