LatAm markets slide

December 19, 2001: 5:57 p.m. ET

Brazil, Mexico off; Argentine index up before state of siege declared.

NEW YORK (CNN/Money) - Latin American markets fell Wednesday, as Brazil's main index slid almost 1 percent and Mexican shares dipped while investors awaited tax reforms.

Argentina's main index made the only gains as the country's financial crisis sparked some of the worst rioting seen there in a decade before the government declared a stage of siege minutes after the market closed.

Toronto stocks also closed lower, giving up the previous day's gains, as a raft of negative U.S. corporate news dragged down the main index.

Argentine stocks jump 7.6 pct on position covering
Argentina's blue-chip MerVal stocks index ended up 7.6 percent as investors covered positions in anticipation of the government's declaration of a state of siege to stop looting and rioting, traders said.

The government declared a state of siege after looting of supermarkets snowballed Wednesday. The order was made minutes after the Buenos Aires Stock Exchange closed.

The MerVal is down about 40 percent so far this year as a recession grinds on into its fourth year, tax revenues shriveled and fears rose Argentina could default on its $132 billion public debt or devalue its currency.

Brazil markets steady despite Argentina woes
The Sao Paulo Stock Exchange's Bovespa Index dipped 0.8 percent to finish the day at 13,290 points after jumping 3.8 percent Tuesday.

The real firmed by 2.7 centavos, or 1.2 percent, to close at 2.296 reals per U.S. dollar, its strongest level since May 11 and below the psychologically key 2.3 level, traders said.

On the Bovespa, traders said the market probably would have fallen further if not for the buoyant performance of Petrobras, which accounts for 8 percent of the index. Its shares advanced 1.7 percent to 49 reals, supported by rising oil prices.

The Bovespa Index is up 2.7 percent so far in December, but has lost 13 percent so far in 2001.

Mexico stocks end lower as tax reform chances weighed
Mexico's IPC index of 35 leading stocks fell 0.3 percent to close at 6,250.74 points in sluggish trade. The index is up about 7 percent since the start of December and has jumped 18.9 percent since bottoming out Sept. 21 in the wake of the Sept. 11 attacks on the United States.

Topping the list of most actively traded issues was market bellwether Telefonos de Mexico, which accounts for about 16 percent of the IPC, falling 0.6 percent to close at 15.83 pesos per share on volume of 18 million shares.

Meanwhile, shares of Mexican cement company Cemex, closed 1.8 percent lower at 45.61 pesos per share after the company said Tuesday it plans to sell non-core operations in Kentucky and Missouri.

Shares of Mexico's leading financial institution BBVA Bancomer ended 2.3 percent lower at 8.12 pesos per share despite positive analyst comments.

Bear Stearns on Wednesday raised its 2002 price target for BBVA Bancomer to 12.10 pesos per share from 9.5 pesos per share citing a revision in its valuation model for the bank.

Toronto stocks close lower as techs, metals sag
The Toronto Stock Exchange 300 composite index closed down 85.37 points, or 1.1 percent, at 7,501.10, as tech behemoths Nortel Networks Corp. (NT: down $0.54 to $6.86, Research, Estimates) and Celestica Inc. fell hard, pulling down the tech-heavy industrial products subgroup by 3.5 percent, and weighing heavily on the broader index.

Nortel fell 94 Canadian cents, or 8 percent, to close at C$10.85 on volume of more than 15 million shares, while Celestica led all net losers, giving up C$4.75, or 6.7 percent, to finish at C$66.50 on volume of 1.2 million shares.

Overall, 12 of the TSE's 14 subindexes retreated, as aluminum producer Alcan Inc. fell C$2.85, or 4.8 percent, to C$56.40, after U.S. rival Alcoa Inc. issued a fourth-quarter earnings warning.

Inco Ltd. retreated 50 Canadian cents to C$26.08, as the metals and minerals subgroup fell 3.76 percent.

Gold stocks fell 3.4 percent, led by Barrick Gold Corp., which dropped 80 Canadian cents to C$25.42, and Placer Dome Inc., which fell C$1.10 to C$17.10.