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EMERGING MARKETS-Latin American stocks slip on U.S. debt concerns

* Brazil Bovespa down 0.25 pct, Mexico IPC falls 0.23 pct

SAO PAULO, Oct 14 (Reuters) - Latin American stocks fell on

Monday as U.S. policymakers remained unable to strike a deal to

avert a potential default, sapping investor demand for riskier


The MSCI Latin American stock index slipped

0.31 percent, its first drop in three sessions.

Brazil's benchmark Bovespa index snapped a three-day

rally while Mexico's IPC index fell its most in nearly a


U.S. policymakers must raise the government's borrowing

authority in order to avoid a default later this week. Still,

equities markets have been supported by hopes that the deadlock

prompts the Federal Reserve to delay cutting back its economic


Brazil's benchmark Bovespa stock index fell

slightly, losing 0.25 percent to 53,015.99, although the index

fluctuated between negative and unchanged throughout the


"It's likely that we're going to see a day with reduced

trading volume, considering the impasse in the United States,

which is putting investors on the defensive," said Silvio Campos

Neto, an economist with Tendencias Consultoria in Sao Paulo.

Shares of homebuilder Gafisa SA fell 2.25

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

state-run oil company Petroleo Brasileiro SA, known

as Petrobras, lost 0.5 percent.

Shares of telecommunications firm TIM Participaçoes SA

slipped 1 percent. TIM's chief executive told a local

newspaper on Monday that the company is not for sale, denying

reports that Telecom Italia SpA wants to sell its 67

percent stake.

Mexico's IPC index fell 0.23 percent to 40,880.80.

Shares of conglomerate Alfa dropped 1.9 percent,

contributing most to the index's fall, while lender Grupo

Financiero Banorte lost 1.33 percent.

Chile's IPSA index retreated for the first session

in three as shares of retailer Cencosud fell 1.16


Latin America's key stock indexes at 1341 GMT:

Stock indexes daily % YTD %

Latest change change

MSCI LatAm 3,403.35 -0.31 -10.11

Brazil Bovespa 53,015.99 -0.25 -13.02

Mexico IPC 40,880.80 -0.23 -6.46

Chile IPSA 3,824.22 -0.34 -11.09

Chile IGPA 18,832.11 -0.24 -10.62

Argentina MerVal 5,241.88 1.47 83.65

Colombia IGBC 14,240.31 0.59 -3.23

Peru IGRA 15,475.29 0.09 -24.98

Venezuela IBC 1,829,905.

0 288.15