Latin American stocks plunge as US rejects bailout

Latin American stocks have plunged as the U.S. House of Representatives rejected a US$700 billion bailout package meant to reboot the global economy.

Sao Paulo's Ibovespa stock index led Monday's losses, tanking 13.8 percent in afternoon trading despite insistence by Brazil's president that contagion from the world financial crisis would be small.

Trading was automatically halted for 30 minutes after the index lost 10 percent, but stocks fell further to 43,766 once trading resumed less than two hours before the market's daily close.

Mexico's Bolsa stock index meanwhile slipped 6.2 percent to 24,008 in midday trading, while Buenos Aires' Merval index dropped 8.8 percent to 1,513 and Chile's Ipsa index fell 4.6 percent to 2,656.