EMERGING MARKETS-Latam stocks index dips as foreigners retreat
* Chile, Brazil stocks rebound off around 6-month lows
* Investors moving out of emerging to developed markets (Updates to close)
By Lizbeth Salazar and Silvio Cascione
MEXICO CITY/SAO PAULO, Feb 10 (Reuters) - Brazilian and Chilean stocks rebounded from around six-month lows on Thursday, but foreign investors sold Latin American stocks after solid U.S. jobless claims data offered boosted prospects elsewhere.
The MSCI Latin American stocks index .MILA00000PUS fell 0.35 percent to close at its lowest since late September, dragged down by a slump in Mexican stocks.
U.S. claims for first-time jobless benefits fell more than expected in the latest week to a 2-1/2-year low, offering better prospects for stocks than in Latin America, traders said.
"We are seeing a lot of selling in emerging markets like Mexico," said Adolfo Lazaro, a trader at Bulltick Capital Markets in Mexico City. "There are a lot of flows leaving emerging markets for developed markets," he said.
Latin American equities have suffered so far this year as many foreign investors have reduced their holdings, turning back to markets such as the United States, where an economic recovery is gaining traction.
Mexico's IPC index .MXX fell 0.91 percent, dragged down by a 1.82 percent loss in retailer Chedraui (CHDRAUIB.MX) and a 3.41 percent drop in miner Grupo Mexico (GMEXICOB.MX).
Brazil's Bovespa index .BVSP rose 0.56 percent, bouncing back after closing at its lowest level since August in the previous session.
Traders said the rebound was driven by bargain hunting after a 10 percent slide since January, but they doubted the broader downtrend was over.
"We don't see new buyers coming to the market," said Rodrigo Nassar, a trader at Vetorial Asset. "Our market is now much more sensitive to bad news than to good news."
Even with the Bovespa rising, emerging market exchange-traded funds -- a preferred investment vehicle for global investors -- posted further losses. The MSCI Brazil Index Fund (EWZ.P) lost 0.23 percent to close at a more than five-month low.
Data on Thursday showed foreign investors pulled 1.24 billion dollars from the Brazilian market between Feb 1 and Feb. 8.
Among stocks gaining in Sao Paulo were shares of Brazilian oil and gas start-up company OGX (OGXP3.SA), which added 4.81 percent as it continued a rebound this week from around an eight month low.
But Cosan (CSAN3.SA), the world's largest sugar and ethanol group, sank 3.94 percent. The company said on Thursday that net income fell 83 percent in the quarter ended Dec. 31, mainly due to rising costs at its sugar operations. For details, see [ID:nN10171015]
In Santiago, the IPSA index .IPSA recovered from its worst drop since June 2009 in the previous session with a 0.73 percent rebound.
Retailers led gains of 1.3 percent on the IPSA. Cencosud CEN.SN advanced 4.05 percent and Falabella FAL.SN added 2.13 percent.
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