Latin American stocks dipped on Friday, hurt by expectations that China could soon move to tighten borrowing costs, even as Brazilian and Mexican indexes carved out modest gains. The MSCI Latin American stocks index dipped 0.11 percent, bringing its weekly losses to 1.83 percent.
Strong import and export data from China initially cheered investors looking for strong consumption from Brazil's top trading partner and a major influence on commodity prices that drive many Latin American stocks. But the news also kept investors on edge that Chinese policymakers could move to raise interest rates to cool their economy, which could slow consumption in China and crimp global growth.
"We're in a battle for perceptions," said Andre Perfeito, an economist with Gradual Investimentos in Sao Paulo. In addition, he added, investors are still unsure about Brazil's economy next year, Latin America's largest, when a new president takes office.
"The opinion with Brazil is that there's still no clear macroeconomic direction" for the incoming Dilma Rousseff administration, he said. Brazil's benchmark Bovespa stock index rose 0.68 percent lifted by shares of mining giant Vale, the world's largest producer of iron ore, rose 1.09 percent. China is the company's major customer. But real estate developer PDG Realty shed 1.34 percent. The Bovespa posted a 2 percent loss for the week. In Mexico, the IPC index rose 0.29 percent, breaking a two session losing streak but still finishing the week down 0.78 percent.