Mexico Bolsa Has Biggest Weekly Drop Since March: Latin Stocks

Nov. 9 -- Mexican shares has their steepest weekly slide in eight months on concern a slowing U.S. economy will crimp demand for Mexico's exports and drag down profits.

The Bolsa index fell 130.86, or 0.5 percent to 29,158.86. The weekly decline of 5.4 percent was the most since the week ending March 2 and was led by copper miner Grupo Mexico SAB. The Bovespa Index of the most-traded stocks on Brazil's Sao Paulo exchange rose 758.65, or 1.2 percent, to 64,320.56, a weekly gain of 0.4 percent.

``We've been lagging in a big way because of the connection to the U.S. economy,'' said Mauricio Brocado, head of equity research at Actinver SA in Mexico City. ``When they catch a cold, we get pneumonia.''

Mexico sells 80 percent of its exports to the U.S., where Fannie Mae, the biggest source of money for home loans, said today its third-quarter loss doubled as the housing slump deepened. U.S. consumer confidence fell in November to the lowest in two years on rising oil prices and falling home values, the Reuters/University of Michigan index showed.

The Mexican economy is also being slowed by rising domestic interest rates and concern that flooding last week in Tabasco state may add to inflation, Brocado said.

``Mexico's market is not one of the favorites among international investors right now,'' he said.

Grupo Mexico, Mexico's largest copper miner, had its biggest weekly decline since September, 2001, falling 16 percent as prices of the metal slumped. Wal-Mart de Mexico SAB, the country's largest retailer, fell 7.9 percent for the week on concern Mexican economic growth will slow and a report yesterday that October sales at stores open more than year declined 1.2 percent.

Railroad's Revenue

Brazil's main stock index gained for a second day, led by state-controlled oil company Petroleo Brasileiro SA.

Petrobras said yesterday its Tupi oil field, which it explores jointly with BG Group Plc and Galp Energia SGPS SA, may contain as much as 8 billion barrels of crude oil and natural-gas reserves. The discoveries ``lay out production for the next 15 years,'' Nomura International Plc analyst Xavier Grunauer wrote in an e- mailed report.

``They've just found the cherry on the cake,'' said Carlos Renato Nunes, an oil analyst with Sao Paulo-based brokerage Coinvalores CCVM. ``There's still a whole cake underneath it.''

Rio de Janeiro-based Petrobras rose 1.8 percent to a record 81.65 reais, adding to its 14 percent gain yesterday.

Chile's main index capped its longest losing streak in a year and biggest weekly fall since Feb. 23 on slowing earnings and a selloff by pension funds in the country.

The Ipsa dropped 0.3 percent to 3,240.88, bringing its weekly loss to 4.4 percent. Lan Airlines SA had its biggest weekly loss in two years, losing 8.8 percent to 7,230 pesos.

Pension Issue

``It's due to less earnings growth, local economic data this week that wasn't good, the pension funds issue, along with the international situation,'' Ramon Lagos, head of research at Penta Estrategia y Inversiones, said by phone.

The index has fallen 7.3 percent in the nine days since regulators told private pension fund managers, known as AFPs, that they must trim equity investments to meet limits.

Argentina's Merval index rose the most in seven weeks, adding 2.3 percent to 2,314.23, reducing a weekly loss to 1 percent.

Telecom Argentina SA, the country's second-biggest telephone company, led the index's gain after it said third-quarter profit tripled on an increase in mobile and high-speed Internet customers. Telecom surged 11 percent, the most since Aug. 17, to 15.8 pesos.

In other Latin American markets, Peru's main index rose, Venezuela's fell and Colombia's was little changed. The Morgan Stanley Capital International index of Latin American shares was little changed at 4,454.96.