EMERGING MARKETS-Euro zone debt fears hit Latam stocks

* Brazil’s Bovespa down 1.13 pct, IPC down 0.39 pct

* Europe debt crisis, Korean military worries weigh

* Mexico links to Spain could be worrisome
(Updates to afternoon)

By Luciana Lopez and Caroline Stauffer

SAO PAULO/MEXICO CITY, Nov 26 (BestGrowthStock) – Latin American
stocks retreated on Friday as investors worried a European debt
crisis could spread, while a warning from Beijing added to
tensions on the Korean peninsula.

The MSCI Latin American stocks index (.MILA00000PUS: )
dropped 1.2 percent, paring early losses. Nevertheless, the
index looked set to lose about 2.7 percent on the week.

Mexico’s IPC (.MXX: ) seesawed, falling 0.4 percent in the
early afternoon despite edging for a time into positive
territory. The index looked set to gain 0.8 percent in the
week.

“There are some local buyers who aren’t in line with what’s
happening abroad, and today there are fewer international
players,” said Gerardo Roman, head of stock trading at
brokerage Actinver in Mexico City.

In Brazil, the benchmark Bovespa stock index (.BVSP: ) slid
nearly 1 percent, paring losses from the morning. The index
bounced slightly at a new support level, the 50 percent
Fibonacci retracement from its August rally.

The index tracked losses of about 3.25 percent for the
week, near its losses in the middle of October.

China issued a warning ahead of U.S.-South Korean naval
exercises as the Seoul government named a career soldier as its
new defense minister amid mounting criticism of the response to
Tuesday’s attack by North Korea. For details, see
[ID:nL3E6MQ058]

Investors dumped riskier assets globally as they saw the
potential for Portugal and Spain to join Greece and Ireland in
seeking a bailout. Because of the large size of Spain’s
economy, a rescue could soak up considerable resources.
[ID:nLDE6AP08Y]

“In New York, there’s a perception that there will be a
contagion effect from Ireland. I happen to think it’s a little
exaggerated,” said Roman.

However, he added, “if Spain’s banking systems turns out
not to be stable, this could affect Mexico. There’s a close
link between Spanish banks and Mexican financial
institutions.”

Those worries are likely to continue next week, analysts
said.

“Next week a Portuguese bill auction and the Spanish bond
auction will test the market,” according to a Danske Bank
report.

U.S. markets were lower in a shortened post-Thanksgiving
session, which kept volumes thin.

In Mexico City, shares of mining company Grupo Mexico
(GMEXICOB.MX: ) slipped 0.4 percent, while the country’s leading
retailer, Walmex (WALMEXV.MX: ), gave up 0.5 percent.

But Mexican conglomerate Alfa (ALFAA.MX: ) gained 1.3
percent, and broadcaster Grupo Televisa (TLVACPO.MX: ) added 0.7
percent.

Hints of tighter interest rates in China especially weighed
in Brazil, which counts China as its top trading partner.
[ID:nTOE6AO08D]

Among declining stocks in Sao Paulo were commodities
heavyweights. Mining company Vale (VALE5.SA: ), the world’s
largest producer of iron ore, lost 1.1 percent. China is its
single biggest customer.

State-controlled energy giant Petrobras (PETR4.SA: ) gave up
0.7 percent, with rival OGX (OGXP3.SA: ) down 1.8 percent.

Chile’s IPSA index (.IPSA: ) gave up 0.4 percent, adding to
losses in the previous session. Nevertheless, the index could
notch a flat week.

Retailer Falabella (FAL.SN: ) moved down 1 percent, while
top-weighted industrial conglomerate Copec (COP.SN: ) retreated
1.1 percent.
(Editing by Jeffrey Benkoe)

EMERGING MARKETS-Euro zone debt fears hit Latam stocks