Latin American markets mostly slipped on Friday as Brazil's benchmark index faced technical resistance despite encouraging economic data, while Mexico's bourse was weighed down by America Movil. Brazil's Bovespa stock index rose early in the session after data showed economic activity in Latin America's largest economy rose in June at its fastest pace since March 2011.
Those gains were short-lived, however, with the Bovespa falling 0.61 percent to 59,082.37 as many investors took the opportunity to book profits as the index approached a key resistance level. The fall took the index to a 0.33 percent weekly loss, reversing three straight weeks of gains.
"Markets have been optimistic over recent data on retail and economic activity, but it's too early to celebrate," said Deborah Morsch, a partner with Zenith Asset Management in Porto Alegre, Brazil. "The Bovespa is very close to 60,000 points, which is a barrier it has faced on numerous occasions and has not been able to break."
Construction firms weighed on the Bovespa, with shares of PDG Realty, Brazil's biggest homebuilder, slipping 1.87 percent and those of rival Cyrela down 1.18 percent. "If you look at the multiples for the homebuilders, they are very low," said Rafael Vendramine, a trader with BES Investimento in Sao Paulo, adding that the relatively inexpensive stocks benefited from a boost in risk appetite in recent days. "Today we see profit-taking because those stocks rose very much in the previous sessions."
The Bovespa rose more than 2 percent in the previous session after June retail sales data came in much better than expected. On Wednesday, the government also unveiled a round of measures to help lure private investment into the nation's creaky infrastructure.
"Here in Brazil, there is a lot of effort on the part of the government to make investment more attractive, but the market is starting to look at 2013's GDP," Morsch said. "This year we started very optimistic but we are ending up at 1.5 percent growth. Corporate results were weak and debt remains an issue that will put pressure on companies next quarter as well. Mexico's IPC index declined 0.41 percent to 40,547.49, posting a third straight weekly loss.
Telecommunications firm America Movil fell 0.81 percent after the company said o n Thursday it is seeking to complete the delisting of its Telmex home phone unit by offering to buy the remaining 2.79 percent of the shares still outstanding. Chile's IPSA index jumped 1.12 percent as fertiliser, lithium and iodine producer Soquimich added 2.0 percent.
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