EMERGING MARKETS-Latam stocks slide on China rate hike

* Bovespa down 1.72 pct, Mexico’s IPC drops 0.4 pct

* BTG Pactual cuts estimates for Brazilian steelmakers

* Cencosud gains on acquisition plans, price revision

By Guillermo Parra Bernal and Caroline Stauffer

SAO PAULO/MEXICO CITY, Oct 19 (BestGrowthStock) – Latin American
stocks fell on Tuesday after a surprise rate hike from China
fueled a broad price drop in commodities and a sell off of
high-yielding assets.

The MSCI Latin American stocks index (.MILA00000PUS: ) shed
2.28 percent as prices of copper, gold and oil prices fell.

Also on Tuesday, China’s central bank said it was raising
benchmark rates by 25 basis points, its first rate hike in
nearly three years. For details, see [ID:nSGE69I0HU]

Investors feared the move could slow China’s rapid growth
and voracious demand for Latin America’s raw materials.

Regional bourses have risen to record highs in recent weeks
as bets on forthcoming monetary easing in the United States
have driven down yields on U.S. safe-haven debt, fueling demand
for higher-risk assets such as Latin American equities.

“The recent rally was so strong that at some point the
market needed to take profits, and nothing better than using
China as the excuse for it,” said Marcio Macedo, who manages
about $41 million in assets at Humaita Investimentos in Sao
Paulo.

Brazilian stocks fell the most in almost two months, pulled
down by homebuilding and commodity shares.

The blue-chip Bovespa index (.BVSP: ) slid 1.72 percent.

Preferred shares in state oil giant Petrobras (PETR4.SA: )
lost 1.86 percent while iron ore miner Vale (VALE5.SA: ), whose
biggest customer is China, fell 1.2 percent.

Brazilian securities firm BTG Pactual on Monday cut its
estimates and price targets for the largest Brazilian
steelmakers on the back of declining prices for some products,
lower-than-expected sales volumes and higher raw material costs
throughout 2011. [ID:nN18276512]

Usiminas, the largest Brazilian maker of flat steel
products, and CSN, Brazil’s largest diversified steel group,
stand to suffer most from the market’s woes, BTG Pactual said
in a report.

Usiminas (USIM5.SA: ) lost 2.16 percent while CSN (CSNA3.SA: )
eased 1 percent.

In Mexico, the benchmark IPC index (.MXX: ) dropped 0.40
percent to after notching a fresh record high in the previous
session.

Miners suffered, with Penoles (PENOLES.MX: ) down 3 percent
and Grupo Mexico (GMEXICOB.MX: ) losing 1.5 percent.

Chile’s blue-chip IPSA index (.IPSA: ) outperformed the
region, advancing 0.22 percent as retailer Cencosud (CEN.SN: )
jumped 3.27 percent in the wake of plans to buy Brazilian
supermarket chain Bretas for $813 million. [ID:nN15193460]

Chile’s bank BCI also upped its price objectives for
Cencosud on Tuesday.

“We reaffirm our positive vision for Cencosud and reiterate
that it is one of our favorites in our recommended portfolio,”
BCI said in a reports.

EMERGING MARKETS-Latam stocks slide on China rate hike