Mexican and Brazilian stocks dipped on Friday on fears of further debt troubles in Europe even after Greece negotiated a bond swap that is a pre-condition to get bailout funds. Mexico's IPC index fell 0.33 percent, sliding 1.6 percent for the week in its worst weekly drop since mid-December. Brazil's Bovespa dipped 0.31 percent, dropping about 1.6 percent for the week.
Concerns about heavily indebted euro zone states and a weak growth outlook in Europe outweighed relief that Greece completed a bond swap with creditors. The restructuring will ease its massive public debt and clear the way for a new international bailout. Analysts said the market could still be troubled by concerns about other heavily indebted European countries such as Spain and Portugal.
"There are still a lot of headaches," said Jorge Gordillo, an analyst at CI Banco in Mexico City. "They are going to release the rescue funds for Greece but it doesn't mean that the problems are gone." The MSCI Latin American stock index managed to end up 0.24 percent. Still the index ended the week down 3.5 percent, clocking its worst performance since mid-December.
Supporting stocks, US employment grew for a third straight month in February, underpinning demand for riskier assets as investors become more confident the country's economic recovery is broadening. Shares were also supported by a series of economic indicators from China on Friday pointing to a "soft landing" in the world's second-largest economy.
China is Brazil's largest trading partner and a key customer for Latin American commodities exports such as iron ore, soybeans and copper. Worries about a sharp slowdown in China's growth have weighed on Latin America's commodities-heavy bourses. "The US data on average are coming in better than expected, and China's government will keep taking action to heat up their economy with lower interest rates and other stimulus," said Pedro Galdi, an analyst with SLW Corretora in Sao Paulo.
In Brazil, preferred shares of state-controlled oil company Petrobras fell 1.58 percent. Chief executive officer Maria das Graças Foster said falling oil prices would make any increase in Brazilian fuel prices unnecessary. In Mexico, telecom giant America Movil declined 1.13 percent and retailer Wal-Mart Mexico fell 1.35 percent. Chile's IPSA index added 0.11 percent. The index which closes earlier than Mexico and Brazil posted a weekly loss of 0.6 percent Retailer Falabella rose 0.77 percent, driving gains in the index, while airline LAN Airlines added 0.72 percent. The company reported passenger traffic rose 17.2 percent in February from a year earlier.