Latam stock sink

Latin American shares sank on Friday as global equity markets tanked on fears a Greek default could hobble major European banks and deepen a global economic slowdown. The MSCI Latin American stock index fell 3.56 percent in its largest one-day percentage drop since global equities tumbled in early August.
Analysts said a recent rally had been derailed. Renewed fears about Europe could end up driving the region's stocks back to their lowest since early August. Investors feared investors holding Greek debt might not respond positively to a bond swap offer despite assurances from Greece that the offer was going well.
A failure of the deal could lead to a Greek default and hammer European banks holding the country's bonds. Media reports Germany was preparing a plan to bailout its banks in case of a default by Greece added to fears about Europe's debt crisis. The planned resignation of the top German on the European Central Bank board laid bare friction over the ECB's policy to help troubled eurozone debtor states through bond purchases.
Unconfirmed terrorism threats against New York City and Washington ahead of the 10th anniversary of the September 11 attacks added to nervousness in markets. Investors were sceptical US President Barack Obama could pull off his proposal from Thursday to boost US job creation. He faces an uphill battle to win support from opposition Republican party members ahead of a 2012 election campaign.
Unemployment in the United States has been stuck above 9 percent and weak data has fanned fears of another US recession that would undermine demand for Latin America's exports. In Brazil, the benchmark Bovespa stock index dropped 3.2 percent, cutting back the gains made after the central bank's surprise 50 basis point interest cut late on Wednesday. Shares of Brazil's state-run oil company Petrobras lost 2.47 percent and homebuilder PDG Realty shed 6.75 percent.
Bucking the negative market trend in Brazil were shares of Magnesita, which traded up 4.33 percent after Credit Suisse resumed coverage of the company with a "buy" rating and per share price target of 11 reais. Mexico's IPC stock index dropped 2.59 percent to 33,812.62 points as shares of America Movil lost 2.49 percent.
The index fell below a key support level at 34,000 points, which coincided with the two-thirds retracement of the IPC's August 2010 to January 2011 rally. Further losses could send the index back toward its one-year low hit in early August. Chile's blue chip IPSA index 2.19 percent as Santander Chile shed 5.24 percent.