Brazilian stocks fell on Friday after weak results from homebuilder MRV dampened the outlook for the country's construction sector, offsetting supportive economic growth data from the central bank. America Movil weighed on Mexico's bourse after a congressional committee passed a reform bill for the telecommunications sector, while Chile's IPSA index extended a recent slide.
Brazil's benchmark Bovespa stock index dipped 0.72 percent to 56,869.28, for a weekly loss of 2.7 percent, its worst since early February. Construction firms contributed most to the index's declines, with shares of MRV Engenharia e Participacoes SA down 8.07 percent after the company reported weaker-than-expected fourth-quarter earnings late Thursday.
"We expect a further negative impact in the stock price in the short term," analysts at Espirito Santo investment bank led by Eduardo Silveira said in an investor note Friday, citing concerns about the company's profitability. Other stocks in the sector fell, with rival Gafisa SA tumbling 7.02 percent and PDG Realty SA slipping 1.02 percent.
The Bovespa was partly supported, analysts said, by data from Brazil's central bank on Friday that suggested a recovery in Latin America's largest economy gained steam at the beginning of the year. Still, Brazil's Bovespa is lagging far behind other markets this year as concerns over high inflation, slow growth and heavy government intervention in the private sector lead investors to seek out safer opportunities elsewhere. "The market here will only improve if we have a signal of political changes next year," said Marcelo Varejao, analyst at brokerage firm Socopa Corretora in Sao Paulo. "Investors need to see a more market-friendly administration."
Mexico's IPC index dropped for the fourth session in five, losing 1.72 percent to close at 42,605.05. Shares of Mexican tycoon Carlos Slim's phone giant America Movil fell 4.29 percent and contributed most to the index's decline after a congressional committee passed an ambitious bill that aims to loosen his hold on the telecommunications market. Chile's IPSA index retreated for the fourth straight day, losing 0.91 percent to close at 4,409.43. Retailer Falabella dropped 3.16 percent, contributing most to the index's decline, while LATAM Airlines Group fell 0.93 percent.