Latin American Markets Extending Declines As Italian Elections Revive Euro-Zone Worries

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Latin American markets are broadly lower today as preliminary results from the Italian parliamentary elections point to a divided government, reviving worries over Europe political and economic woes.

The prospects for a hung parliament is chasing investors into safe haven plays like the U.S. dollar, putting pressure on emerging currencies such as the Mexican peso and the Brazilian real. Most stocks are following currencies lower, with Brazil's benchmark Ibovespa index falling for the tenth session in 11. The Mexican IPC index also is off about 0.3%, extending its losses after yesterday falling to its lowest level of the year.

Telecom and utility stocks - typically seen as defensive plays - are mostly higher today while most energy stocks around the region are down on demand concerns. Financial stocks are mixed, with ADRs of several banks, including Banco Bilbao Vizcaya Argentaria S.A. ( BBVA ), recouping a portion of their steep declines during Monday's session.

Here's where the regional markets stand today:

- Ibovespa down 377 (-0.7%) to 56,240.5.

- IPC (Mexico City) down 134 (-0.3%) to 43,364.8.

- Santiago Index IPSA down 22.3 (-0.6%) to 3,872.2

- Merval Buenos Aires down 41.7 (-1.3%) to 3,083.

In commpany news, U.S.-listed shares of Mercadolibre Inc. ( MELI ) are down about 2% after the online retailer beat EPS estimates with its Q4 earnings but missed revenue targets. The Argentine company reported a $0.69 per share profit during its December quarter, up from a $0.47 gain in the year-ago quarter and topping the Thomson Reuter mean forecast of $0.61 per share. Revenue rose 20% over the same quarter last year to $103.8 mln, trailing the Street view by $1.47 mln.

In other company news, shares of Grupo Modelo SAB de CV (GMODELOC.MX) are up about 0.6% today in Mexican trading amid reports that negotiations between Anheuser-Busch InBev ( BUD ) and the U.S. Department of Justice are close to a settlement allowing the brewer's planned purchase of Modelo, according to Reuters, citing two sources familiar with the matter.

BUD nearly two weeks ago revised the deal to address anti-trust concerns, offering to sell a Modelo brewery to Constellation Brands ( STZ ). It also would give STZ perpetual rights to Corona and other Modelo brands in the United States.

The moves followed the Justice Department earlier this month suing to block the proposed buyout. A federal judge late Friday agreed to table the government's suit while the two side work to finalize a deal.

BUD shares are down about 0.4% in U.S. trading today. STZ is up about 0.3% and near 52 week highs.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: BBVA , BUD , MELI , STZ

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