EMERGING MARKETS-Brazil stocks down as lower earnings hit Petrobras shares

SAO PAULO, Nov 14 (Reuters) - Brazilian stocks fell on Tuesday, weighed down by a slump in shares of state-controlled oil company Petróleo Brasileiro SA in the wake of smaller-then-expected quarterly profits. Common shares in Petrobras dropped 5.7 percent to 16.52 reais, the biggest daily decline in six months. Preferred shares were off 5.1 percent. Third-quarter profit of Petrobras, as the company is known, missed estimates of a big rise, hit by weak margins in refining and nonrecurring charges. In a client note, UBS analysts led by Luiz Carvalho said the company may find it hard to continue cutting investment to reduce debt. "We believe the company is getting closer to a recurrent operational level and further improvements might be harder to achieve from now on, making divestments even more crucial for the deleveraging process," they wrote. In a presentation the day after posting results, Petrobras nearly doubled its fundraising forecast for 2017 but trimmed its outlook for divestments. At the other end of the spectrum, JBS SA jumped about 5 percent to a one-month high after it recorded strong third-quarter operating margins and lower debt levels. "More than results per se, which were strong and show just how a higher sense of urgency can help to restore value, the investment case is now, more than ever, a story of rebuilding investor confidence from scratch," analysts at Banco BTG Pactual SA wrote in a report. The benchmark Bovespa stock index dipped 0.6 percent, while the Brazilian real slipped 0.1 percent. Most Latin American currencies seesawed as investors awaited further clues over plans for U.S. tax reform. The Mexican peso was down 0.1 percent ahead of a new round of negotiations over a trade pact between the United States, Mexico and Canada later this week.

Key Latin American stock indexes and currencies at 1540 GMT:

Stock indexes daily % YTD %

change change Latest

MSCI Emerging Markets 1120.01 -0.29 30.27 MSCI LatAm 2714.53 -0.88 17 Brazil Bovespa 71888.63 -0.81 19.36 Mexico S&P/BVM IPC 47770.53 -0.48 4.66 Chile IPSA 5357.59 0.39 29.06 Chile IGPA 26985.04 0.32 30.15 Argentina MerVal 26157.65 -2.09 54.62 Colombia IGBC 10676.18 -0.79 5.41 Venezuela IBC 662.34 1.19 -97.91 Currencies daily % YTD %

change change


Brazil real 3.3009 -0.11 -1.57 Mexico peso 19.1500 -0.12 8.32 Chile peso 631.5 -0.40 6.21 Colombia peso 3020.25 -0.47 -0.62 Peru sol 3.243 -0.06 5.27 Argentina peso (interbank) 17.4500 0.32 -9.03 Argentina peso (parallel) 17.99 0.50 -6.50

(Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)