By Carla Mozee

Latin American stock markets fell Friday, with the last day of trading in May marked by fresh worries about Europe's fiscal conditions as Spain's sovereign-debt rating was downgraded.

The indexes tracking the largest regional equity markets finished in the red for the month, with losses underscoring investor fears that debt-troubled nations in Europe, including Greece, Spain and Portugal, will derail worldwide economic recovery efforts.

On Friday, Fitch Ratings cut its rating on Spain to AA+ from AAA, citing concern that the country's growth rate will be hurt as the country moves to reduce its debt load.

Brazil's Bovespa fell 8.3% in May, its worst monthly decline since a nearly 25% slide in October 2008. Mexico's IPC dropped 3.5%, its biggest decline since January.

Argentina's Merval tumbled 8.2%, the sharpest decline since October 2008 when the index sank 37%. Chile's IPSA fell 1.4%.

On Friday in Sao Paulo, the Bovespa fell 0.2% to 61,946.99, as finance, home building, utility stocks slumped. Decliners included home builders Gafisa (GFA) and PDG Realty, down 1.7% and 1.9%, respectively. Iron ore giant Vale (RIO) fell 0.4%, while steel producer Gerdau (GGB) managed to pick up 0.7%.

Also lower were shares of Vivo Participacoes (VIV), down 3.3%. The largest wireless services provider in Brazil is in the middle of a battle between its parent companies for full control of Vivo. Bloomberg News reported Friday that Portugal Telecom (PT) is talking to investors about launching a potential counterbid for Telefonica's (TEF) 50% stake in Vivo.

But shares of market heavyweight Petrobras (PBR) traded 1.2% higher. Still, investor uncertainty about a major capitalization plan involving the oil company and the Brazilian government has left the preferred shares down about 14% in May.

In Mexico City, the IPC index closed Friday with a loss of 1.6% at 31,547.55.The Merval slipped 0.2% to 2,199.02, but Chile's IPSA outperformed its rivals with a 0.6% rise to 3,833.91.

Among exchange-traded funds, the iShares MSCI Chile Investable Index Fund (ECH) fell 1.8% in May. The iShares MSCI Mexico Index Fund (EWW) logged a monthly loss of 7.7%, the deepest pullback since February 2009. The iShares MSCI Brazil Index Fund (EWZ) tumbled 12%, its worst showing since January.