EMERGING MARKETS-Latam stocks dip as China weighs

* Brazil seen as attractive after lukewarm 2010

* Petrobras bounces after steep drop on previous day

* Brazil’s Bovespa up 0.31 pct, Mexico’s IPC down 0.2 pct

(Updates to afternoon)

By Michael O’Boyle and Luciana Lopez

MEXICO CITY/SAO PAULO, Brazil, Jan 14 (BestGrowthStock) – Latin
American stocks dipped on Friday following news that China had
tightened bank reserve requirements, but Brazilian stocks
gained as oil company Petrobras rebounded from recent losses.

The MSCI Latin American stocks index (.MILA00000PUS: )
dropped 0.27 percent, helping the gauge recover losses made
during the previous week but leaving it flat so far in 2011.

China, a major global commodities consumer and Latin
American trading partner, raised bank reserve requirements on
Friday for the fourth time in just over two months. For
details, see [ID:nTOE706030]

“The reserve requirements there affect the prices of and
demand for commodities,” said Andre Luis Querne, a partner at
asset management firm Rio Gestao de Recursos.

Investors are concerned that China could make even tougher
moves to curb strong growth and rising inflation. That could
have knock-on effects around the world, curbing expectations
for global growth and demand for Latin America’s commodities.

Regional bourses were mixed. Brazil’s Bovespa stock index
(.BVSP: ) rose 0.31 percent, while Mexico’s IPC index (.MXX: )
dipped 0.2 percent, giving up much of the ground gained on
Thursday.

Analysts noted Mexico’s stock market has underperformed
this week, hurt by selling from local pension funds.

The peso hit a more than two-year high against the dollar,
and some pension funds jumped to snap up stocks in the United
States and Brazil.

“The Brazilian market is very attractive because it did not
go anywhere last year,” said Rodolfo Navarrete, an analyst at
brokerage Vector.

While Brazil’s market gained only around 1 percent last
year, Mexico notched a nearly 20 percent advance and has hit
repeated record highs, peaking most recently on Jan. 3.

“Mexico is expensive, but with more flows expected from
abroad into our stock market, it will get going,” Navarrete
added.

Preferred shares of Brazilian state-controlled energy
company Petrobras (PETR4.SA: ) pushed up the Bovespa index,
rising 0.88 percent. That stock tumbled in the previous
session, posting its biggest one-day drop since November.

Jetmaker Embraer (EMBR3.SA: ) vaulted 10 percent, Friday’s
strongest gainer in the index.

Goldman Sachs analysts, led by Noah Poponak, on Friday
added the company’s American Depositary Receipts (ERJ.N: ) to the
bank’s “conviction buy” list. [ID:nN14142977]

“Embraer is an under the radar, uniquely positioned,
emerging-market driven, late cycle industrial with a strong
balance sheet and 3 percent dividend yield,” Poponak and his
team wrote in a report.

In Mexico, the country’s most liquid stocks suffered as
pension funds sought better prospects elsewhere, traders said.

Top retailer Wal-Mart de Mexico (WALMEXV.MX: ) shed 0.87
percent, miner Grupo Mexico (GMEXICOB.MX: ) lost 1.04 percent and
telecom company America Movil (AMXL.MX: ) gave up 0.28 percent
for a possible fourth losing session out of five.

In Chile, the blue-chip IPSA index (.IPSA: ) declined 0.16
percent in choppy trading.

The Santiago stock exchange has come uncoupled from
regional bourses in recent weeks after Chile’s central bank
announced a $12 billion currency intervention.

Retailer Falabella (FAL.SN: ) lost 1.32 percent while its
rival Cencosud (CEN.SN: ) shed 1.29 percent.
(Additional reporting by Guillermo Parra-Bernal; Editing by
Kenneth Barry)