* Brazil's Bovespa falls 0.34 percent, Mexico's IPC up 0.47
MEXICO CITY, Dec 10 (Reuters) - Brazilian stocks edged loweron Tuesday, with investors cautious over a potential tapering ofU.S. monetary stimulus as well as slightly weaker-than-expectedeconomic data in China.
The U.S. Federal Reserve is expected to begin trimming itsmonthly asset purchases in March, a Reuters poll showed onMonday, but some economists believe it could come as early asthis month or at the January policy meeting.
The Fed's stimulus program has helped support demand forriskier assets such as Latin American equities and increasedspeculation over Fed action has tended to drag on local shares.
Data on Tuesday showed industrial output in China grew 10percent in November, a four-month low and slightly below marketexpectations.
China is Brazil's biggest trading partner and a keypurchaser of Latin American commodities exports such as ironore, soy, copper and petroleum.
Brazil's benchmark Bovespa stock index was down 0.34percent to 50,993.02 after a three-day rally.
Iron ore miner Vale and state-controlled lenderBanco do Brasil SA contributed most to the index'slosses, falling 0.85 percent and 1.44 percent, respectively.
Itaú Unibanco Holding SA, Brazil's largestnon-government bank, dipped 0.54 percent. The bank's return onequity is likely to surpass 20 percent next year as it benefitsfrom lower delinquencies and bad loan provisions and climbinginterest income, a source told Reuters.
Homebuilder Gafisa SA helped support the index,rising 3.82 percent after the company said it had concluded thesale of 70 percent of its Alphaville unit and announced a stockbuyback.
Mexico's IPC index added 0.47 percent to end at42,490.10 points, lifted by a 1.81 percent rise in shares ofmedia giant Televisa.
Banking group Grupo Banorte gained 1.02percent.
Chile's IPSA index added 0.11 percent, thanks to a1.79 percent rise in shares of blue-chip electricity producerEndesa Chile. A local newspaper reported on Tuesdaythat the company was weighing whether to build a new natural gasinstallation, citing an Endesa executive.
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