MEXICO CITY (AFX) - Stocks closed lower Monday across much of Latin America as investors were spooked by high international oil prices and cautionary remarks by Federal Reserve Chairman Ben Bernanke.
In one exception, Peru's indexes gained sharply in early trading Monday on news of the election of former President Alan Garcia, but the increase tapered off by the end of the session. Garcia is viewed by investors as likely to continue the country's market-friendly policies.
The Lima Stock Exchange's broad general index gained 0.65 percent to close at 7,751 while the selective blue chip index rose 5.92 points, or 0.05 percent, to 13,153.
Standard & Poor's credit ratings agency said Garcia's victory won't have any immediate effect on Peru's outlook or debt rating, which it places at double-B, two notches below investment grade.
In Brazil, the benchmark Ibovespa index tumbled 3.2 percent to close at 36,740 points. Volume was light at 1.5 billion Brazilian reals ($667 million).
The downward pressure from oil prices and Bernanke's remarks offset the market's positive response to the Brazilian government's decision to buy back $4 billion in dollar- and euro-denominated bonds.
Responding to the buyback, the Brazilian real closed stronger at 2.249 reals to the dollar, from Friday's close of 2.284 per dollar.
The latest debt repurchase was part of the government's plan to buy back a total of $20 billion in overseas debt in 2006. From January through May, the treasury repurchased $11.7 billion in debt as part of the program, which was announced in January.
Mexican stocks also followed Wall Street lower Monday, with the IPC index falling 2.4 percent, or 467 points, to 18,955. Mexico's peso closed Monday at 11.305 to the dollar, up from 11.334 at Friday's close.
Argentina's benchmark Merval Index ended 2.5 percent lower at 1,651 points, while the broader General Index slid 1.8 percent to 78,458 points.
Chile's 40-share benchmark Ipsa index closed at 2,149 points, down 0.7 percent from Friday's closing at 2,164, in reaction to much lower-than-expected April economic activity data released before the market opened.
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