EMERGING MARKETS-Brazil stocks snap 9-day rally; miner Vale down

* Steelmaker CSN, Gerdau, Usiminas down after two-session gain * Traders step up bets on PDG Realty; Petrobras declines * Brazil Bovespa down 0.37 pct; Mexico IPC rises 0.62 pct By Lucas Iberico-Lozada SAO PAULO, Aug 20 (Reuters) - Brazilian stocks opened lower on Tuesday, snapping a nine-session rally, led by declines in shares of mining and steel producers despite resilient prices for the commodities in global markets. The benchmark Bovespa stock index shed 0.37 percent to 51,384.15 points, putting an end to an over-4,000 point gain that began two weeks ago. The rally, the longest since the 12-day rally staged at the end of July 2010, drove the Bovespa to its highest level in more than two months. "Since the Bovespa rose in previous sessions despite an uncertain outlook and with the dollar and interest rates higher, it's natural for there to be a correction in gains," said Joao Pedro Brugger, an analyst at Leme Investimentos in the southern city of Florianopolis. Mexico's IPC index saw a moderate recovery from an over one percent drop in the previous session, while Chile's bourse snapped a four-session slump. Among stocks weighing heavily on the Bovespa were shares of firms involved in steel production. Mining giant Vale SA, the world's largest iron-ore miner, reversed the previous session's gains, while steelmakers Gerdau SA, Usinas Siderurgicas de Minas Gerais SA, or Usiminas, and Cia Siderurgica Nacional , or CSN, all backtracked from a two-session surge. Shares in the steel mills fell on speculation that CSN, Usiminas, and Gerdau are in talks to buy Porto do Sudeste, currently operated by MMX Mineracao e Metalicos SA, the mining company owned by embattled tycoon Eike Batista, traders said. Often, talks of mergers and acquisitions activity leads to declines in those stocks, on concerns of a potential debt expenses that may be incurrred in a takeover. Shares of state-run oil company Petroleo Brasileiro SA , known as Petrobras, and homebuilder PDG Realty SA were being "shorted" heavily, traders said. Petrobras saw declines of 0.8 percent, while PDG fell 2.7 percent. Traders who sell securities "short" borrow shares and then sell them in the hope that the price will fall, so they can buy them back more cheaply, return them to the lender and pocket the difference. Mexico's IPC index added 0.62 percent to 41,742.10 points a day after its biggest one-session drop in three weeks. Shares of telecommunications firm America Movil, led by billionaire Carlos Slim, led the index's gains, adding 2.3 percent. Retail giant Wal Mart de Mexico rose 1.3 percent. Chile's IPSA index gained by 0.25 percent to 3,712.10 points. The index was led higher by gains for LATAM Airlines Group and retailer Falabella. Latin America's key stock indexes at 1448 GMT: Stock indexes daily % YTD % Latest change change MSCI LatAm 3,130.33 -0.05 -17.53 Brazil Bovespa 51,384.15 -0.37 -15.70 Mexico IPC 41,742.10 0.62 -4.49 Chile IPSA 3,712.10 0.25 -13.70 Chile IGPA 18,382.89 0.19 -12.75 Argentina MerVal 3,832.92 0.46 34.29 Colombia IGBC 13,628.60 -1.03 -7.39 Peru IGRA 16,605.17 0.33 -19.51 Venezuela IBC 1,288,666.22 0 173.35

This article is taken from Reuters.com