Brazilian stocks tumbled on Friday to the lowest in more than four years as investors remained concerned about an end to the US Federal Reserve's bond-buying scheme, worried about the Brazilian economy and anxious over a mass protest movement. Mexican stocks recovered, however, adding 1.38 percent, as investors searched for bargains. Chile's IPSA traded flat.
Brazil's benchmark Bovespa stock index dropped 2.4 percent to close at levels not seen since April 2009. On Thursday, regional markets nosedived a day after Fed Chairman Ben Bernanke gave a roadmap for a winding down the US central bank's asset-buying scheme, which has drawn investors to emerging markets by keeping US interest rates low.
Brazil's index staged a late-day recovery in the previous session when bargain-hunters stepped in following sharp losses, but failed to stage a similar rally on Friday. The selloff was "amplified" by protests that saw more than 1 million people in over 100 cities take to the streets, Barclays' analyst Marcelo Salomon said in a research note, calling on the government to address, among other things, some of the country's economic weaknesses.
Brazil's current account deficit widened in May as the trade balance remained weak, central bank data showed on Friday, reflecting the deterioration of the country's external accounts this year. Shares of state-run oil company Petroleo Brasileiro SA, known as Petrobras, fell 3.29 percent, contributing most to the index's decline, while shares of rival OGX Petroleo e Gas Participacoes SA, controlled by Brazilian billionaire Eike Batista, lost 5.75 percent. In Mexico, lender Grupo Financiero Banorte rose 2.88 percent, while mining firm Industrias Penoles jumped 9.95 percent. Chile's IPSA index fell slightly, as a 3.34 percent loss for forestry and paper company CMPC weighed.