EMERGING MARKETS-Brazil stocks drop as state-run firms sink

Reuters

* Brazil's Bovespa falls 0.96 pct, Mexico's IPC down 0.15

pct

SAO PAULO, Nov 12 (Reuters) - Brazilian stocks slipped for

the third session in four on Tuesday, due mostly to a fall in

shares of state-run companies Banco do Brasil and Petrobras.

Mexico's IPC index edged lower, while Chile's bourse

rose its most in nearly two weeks.

Brazil's benchmark Bovespa stock index fell 0.96

percent to 52,117.81, a level it has not closed below in over

two months.

Shares of state-run oil company Petroleo Brasileiro SA

, known as Petrobras, fell 1.5 percent, contributing

the most to the index's decline.

The shares had risen slightly in early trading after an

extraordinary board meeting was announced for Petrobras on

Tuesday, with traders speculating that the company could be in

negotiations with the government over a fuel price hike.

Petrobras imports fuel to meet domestic demand while

reselling it at a loss at the government's insistence as a means

to tamp down inflation.

The shares dropped back into negative territory soon after,

when Finance Minister Guido Mantega, who also serves as the

chairman of Petrobras' board, told reporters that fuel prices

were not on the meeting's agenda.

Shares of fellow state-run company Banco do Brasil SA

dropped over 5 percent, their biggest loss in over

four months, after the company said consumer loan growth would

likely slow for the rest of 2013.

"The market is seeing the results and beginning to look

ahead to 2014, when we may have an economy that isn't so

strong," said Felipe Rocha, an analyst with Omar Camargo

Corretora in Curitiba, Brazil.

Rocha added that investors may also be seeing an opportunity

to take profits following four straight monthly gains in the

stock.

Mexico's IPC index slumped for a seventh straight

session, losing 0.15 percent to 39,628.36.

Shares of bottling firm Femsa dropped 0.7

percent, contributing most to the index's losses, while

conglomerate Alfa rose 1.5 percent.

Chile's IPSA index gained 0.64 percent to 3,801.46,

boosted by a 1.6 percent rise in shares of conglomerate Copec

and a 1.7 percent gain in regional energy group Endesa

Chile.

Shares of LATAM Airlines rose 1.1 percent after the

company said its operating margin improved in the third quarter.

Latin America's key stock indexes at 1623 GMT:

Stock indexes daily % YTD %

Latest change change

MSCI LatAm 3,229.15 -0.53 -14.52

Brazil Bovespa 52,117.81 -0.96 -14.49

Mexico IPC 39,628.36 -0.15 -9.33

Chile IPSA 3,801.46 0.64 -11.62

Chile IGPA 18,765.51 0.48 -10.94

Argentina MerVal 5,347.20 -1 87.34

Colombia IGBC 13,276.63 -1.50 -9.78

Peru IGRA 15,892.93 -0.33 -22.96

Venezuela IBC 2,515,047.2 -1.61 433.49

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