Latam stocks fall as markets wait for U.S. Fed

Latin American stocks fell in early trading on Wednesday ahead of a policy statement from the U.S. Federal Reserve and a first-ever news conference from the bank’s chairman.

The MSCI Latin American stocks index .MILA00000PUS dropped 1.2 percent, touching a one-week low.

“There’s a lot of caution around the Fed. The market is a little in a state of waiting — not just around the decision this time, but especially around the Bernanke conference after,” said Raphael Martello, an economist at Tendencias Consultoria in Sao Paulo.

Fed Chairman Ben Bernanke on Wednesday will likely use his first-ever news conference on monetary policy to hammer home the case for a patient approach to withdrawing the central bank’s extensive support for the U.S. economy. [ID:nN26291565]

“Because the conference is a new component, the market is quite anxious to hear what he has to say,” Martello added.

The United States is the world’s largest economy, and its ultra-easy monetary stance has helped flood international markets with cash and boost riskier global assets such as emerging market stocks.

Brazil’s benchmark Bovespa stock index .BVSP fell 1.47 percent, falling back from resistance at its 50-day simple moving average and the 38.2 percent Fibonacci retracement of the Bovespa’s May to November rally. That Fibonacci level also provided resistance in March.

Heavyweight commodities stocks fell as the Reuters-Jefferies commodities index .CRB and crude oil CLc1 both dropped.

Shares of petroleum company Petrobras (PETR4.SA) moved down 1.22 percent, as rival OGX (OGXP3.SA) lost 2.92 percent.

Mining company Vale, the world’s largest producer of iron ore, also declined. Preferred shares (VALE5.SA) retreated 1.37 percent, and the common stock (VALE3.SA) fell 1.96 percent.

Mexico’s IPC index .MXX fell 0.3 percent, falling below the 50-day simple moving average, suggesting short-term momentum could be petering out.

Shares of America Movil (AMXL.MX), one of the world’s biggest telecommunications firms, lost 0.24 percent, as Walmex (WALMEXV.MX), the country’s leading retailer, slipped 0.59 percent.

Chile’s IPSA index .IPSA fell 0.32 percent, potentially snapping a five-session streak of gains.

Fertilizer, lithium and iodine producer Soquimich SQM_pb.SN gave up 1.63 percent, as Banco Santander Chile (STG.SN) retreated 0.65 percent.