By Carla Mozee

Latin American equity markets were mixed Monday, with Brazilian shares under pressure while Argentina's benchmark rose in the wake of the government's plan to expand its infrastructure investment program.

Brazil's Bovespa index fell 1.8% to 38,655. Energy and consumer-durable shares were the only groups to post gains, but they were off their highest levels of the session.

Oil giant Petrobras (PBR) shares rose 1.8%, pulling back from a nearly 6% jump after crude-oil futures erased their advance. Crude prices leaped more than 8% to above $50 a barrel, but worries about weak demand began to outweigh expectations that OPEC will cut production when the cartel meets later this week.

Shares of iron-ore producer Vale (RIO) rose 1.5%, the only company in the steel sector to see share-price gains.

Communication stocks were off 3% in Sao Paulo, led by cell services provider Tim Participacoes (TSU). Its shares fell 11% to also pace overall market decliners.

Shares of competitor Vivo Participacoes (VIV) fell 0.9%.

Credit Suisse named Vivo and cable company Net Servicos de Comunicacao (NETCD) among its 2009 top picks in the Latin American telecom sector, and said it was overweight wireless stocks.

But the broker also lowered its 12-month target prices for the group by an average of 21% "to incorporate less favorable macro assumptions."

Shares of Net were off 5.6%.

Cosan Ltd. (CZZ) shares lost 4.2%. The sugar and ethanol producer's holding company on Friday evening swung to a second-quarter net loss of 380.7 million reals. Revenue rose to 715.1 million reals from 627.5 million reals a year ago.

Banking stocks were also in the red. Banco Itau (ITU) lost 4.4%, Unibanco (UBB) fell 5.7% and Bradesco (BBD) gave up 3%.

Elsewhere, market professionals lifted their forecast for economic growth in Brazil for 2008 while decreasing their outlook for inflation.

Economists polled for the country's central bank weekly survey released Monday now expect growth of 5.59%, above the previous forecast for 5.24%. The consumer price index is now expected to come in at 6.13%, down from 6.20%.

The decline in inflation throughout emerging markets "might help the global economy pull out of the slump," said Danske Bank in a research note Monday.

The drift downward in inflation figures "should open the door for further monetary easing for most emerging markets in the coming months."

Last week, central banks in Brazil and Chile held their respective benchmark interest rates steady as policymakers said they wanted to continue monitoring macroeconomic conditions.

The IPC was off 15 points to 21,390, paring earlier losses. Trading in Mexico was closed Friday for a holiday.

Volume leader America Movil (AMX) fell 2.7% and Grupo Televisa (TV) lost 1.1%.

The Mexican wireless giant and the broadcaster were also placed on Credit Suisse's telecom/media top-picks list.

But the session was led by fixed-line operator Telefonos de Mexico (TMX), with its shares up 4.8%.

Argentina's Merval rose 1.9% to 1,115.49 as the government said it will expand its public-works spending program to 111 million pesos, from 71 million pesos. The program is aimed at creating more jobs to stimulate economic growth.

Stock in steel tube maker and market heavyweight Tenaris (TS) rose 2.4% and shares of oil company Petrobras Energia (PZE) gained 3%.

Chile's IPSA shed 0.8% to 2,325.92.

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