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LatAm markets sink
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October 29, 2001: 6:25 p.m. ET
Brazil, Mexico lose ground on fear of possible Argentine debt default.
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NEW YORK (CNNmoney) - Latin American markets plummeted Monday, taking the lead from Argentina, on fears that the country may default on certain debts.
Argentine markets sank 8.67 percent, Brazil's fell 3.4 percent, and Mexico trading dipped 1.65 percent. In Toronto, markets dropped 1.45 percent by close.
Argentine markets fear debt default
The leading MerVal index ended 8.67 percent lower, deepening their losses in late trade after news Argentina's Finance Undersecretary Julio Dreizzen resigned for what he called "personal reasons."
Dreizzen worked under the supervision of Finance Secretary Daniel Marx, Argentina's chief debt negotiator.
The Merval slid 20.85 points to close at 219.54. Turnover was thin at $8.5 million. Six shares were unchanged, 13 advanced and 41 declined.
"Basically the market was hoping for new measures over the weekend and since they didn't show up the reaction was negative," said Esteban Gonzalez Carreto, an analyst for BBVA Banco Frances.
"The market sees more likelihood of a default," he said.
Argentina's benchmark Global 2008 dollar bond slid 13 percent to bid at 46.625.
Investors have waited weeks for Argentina to give details on an expected local debt swap, a revenue-sharing agreement with the provinces and other measures designed to bolster consumer spending in an economy stuck in recession for more than three years.
Traders had expected Argentina to unveil the raft of measures last weekend, but tough talks to reduce federal tax revenue sent to cash-strapped provinces bogged down.
A government spokesman said on Monday details of the measures would be made public on Tuesday or Wednesday.
Traders said they were worried the delay could mean a planned debt swap might have terms unfavorable to investors that could constitute a debt default, concerns vigorously denied by the Argentine government.
On the Buenos Aires Stock Exchange, financial holding Grupo Financiero Galicia sagged 13.35 percent to 54.5 cents. Energy group Perez Companc lost 7 cents to close at $1.00.
Brazil stocks react to Argentina market
Brazilian stocks sank 3.4 percent Monday on renewed fears of debt default in neighboring Argentina, a poor performance by bonds, and bad corporate results in the United States, traders said.
Electricity firms moderated their losses or firmed on expectations of a rise in power prices, with the exception of utility Copel, which slumped on fears its privatization auction Wednesday might be postponed or canceled.
Traders said a delay in the long-awaited Argentine economic package heightened fears the neighboring economy was going to collapse, sending the Sao Paulo Stock Exchange's benchmark Bovespa stock index down 3.43 percent to 11,377.
The index had been on the rise on optimism Argentina would be able to solve its problems with a local debt swap and a package to boost consumption.
But huge federal power holding Eletrobras sailed against the wind, rising 0.46 percent to 33.05 reals on expectations the government would compensate power utilities for losses due to energy rationing this year by allowing higher electricity prices.
Minas Gerais state utility Cemig shed 1.3 percent to 26.7 reals. Copel, scheduled to be auctioned Oct. 31 at a minimum price of 5.07 billion reals, fell 4.33 percent because the market feared a postponement or cancellation of the auction.
The long-suffering real finished touch stronger at 2.723 after Friday's 2.725.
Elsewhere, state oil company Petrobras, one of the market's heavyweights, lost 1.9 percent to 57.1 reals, buoyed by an end of a five-day oil workers' strike and output started returning to normal.
Brazil's largest mobile telephone operator, Telesp Celular , weighed down the market with a 7.1 percent fall to 5.77 reals after Friday's announcement of a worse-than-expected quarterly net loss.
No. 1 local private bank Bradesco fell 5.32 percent to 10.32 reals after a lower than expected profit.
Mexico stocks, peso spooked
Mexico's IPC index of 35 leading stocks fell 1.65 percent to close at 5,599.13 points. The index rose about 1.84 percent last week but remains 20 percent below its 2001 high, posted on July 4.
In the currency market, the benchmark 48 hour peso finished 1.95 centavos weaker from Friday at 9.2590 per U.S. dollar.
U.S. third-quarter gross domestic data is scheduled to be reported Wednesday with many expecting a drop of close to 1 percent. Mexico sends nearly 85 percent of its exports to the United States.
In local market action, topping percentage losers were media and wireless issues, which tend to be sensitive to movements on the technology-laden Nasdaq. The Nasdaq slumped 3.92 percent.
Shares of Mexico's leading media group Televisa shed 3.29 percent to close at 14.39 pesos per share, while its New York-listed American depositary receipts (ADRs) lost 2.5 percent to $31.60.
America Movil, Mexico's and Latin America's largest wireless service provider, saw its shares slide 2.62 percent to close at 6.69 pesos per share.
Shares of Mexico's No. 2 wireless service provider Iusacell tumbled 4.67 percent to close at 2.45 pesos per share.
Most of Mexico's blue chip firms have reported third-quarter results, with the exception of leading banking group BBVA Bancomer, whose report is expected on Tuesday.
Shares of Bancomer slipped 2.57 percent to close at 7.21 pesos per share, down 21 percent since the end of last year.
Toronto stocks falter on weak techs
Toronto stocks dropped 100 points just before market close Monday, as a weakening Nasdaq pulled down Canadian tech stocks, and the banking sector continued to reel from loan-loss provision news.
The Toronto Stock Exchange composite index was down 101.72 points, or 1.45 percent, at 6,903.20.
Twelve of the 14 TSE subindexes were down, as the tech-heavy industrial products sector fell 4.13 percent, and the financial services sector dropped 1.55 percent.
Gold stocks made gains on the day, rising 1.03 percent.
-- from staff and wire reports 
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