Brazilian Market Jumps Close to 5% While Dollar Rises Over 3%

Brazil's Bolsa de Valores, Bovespa After another shaky day, the Bovespa, Brazil's stock exchange, going along with Wall Street, ended this Thursday, November 13, in a very positive note. There were frequent oscillations between black and red during the Friday trading session, with the market having a 2% decline, but at the final bell the Ibovespa index had climbed 4.71% to 35.993 points. 

3.9 billion reais (US$ 1.69 billion) changed hands.  As for the dollar, the American currency had a big jump rising 3.4% to 2.368 for a dollar.  Brazil's central bank intervened several times during the day trying to hold the greenback. The monetary authority held two direct sales of dollars, a traditional swap auction plus a dollar loan auction in the value of US$ 1,3 billion, but nothing helped.

On Wednesday, Latinamerica's main stock markets had ended sharply weaker following on Wall Street and US Treasury Secretary Henry Paulson's announcement that it would re focus the US$ 700 billion bailout fund.

Brazil's Bovespa index closed at 34,373.99, down nearly 7.8% from Tuesday's close ending a three-session run of gains. Shares of major miner Vale closed nearly 6.7% off as prices of several minerals touched new lows on expectations of weaker demand for industrial metals.

The Brazilian currency real lost nearly 2.9% to 2.289 per dollar, battered by speculation that a global slowdown will cut investment flows to emerging markets. The real weakened even after the central bank offered dollars on the spot currency market, the first such sale in almost a week, and sold about US$ 495 million in currency swaps.

The other big market, Mexico, saw the benchmark IPC stock index plunge 5% on mounting worries that the deepening economic slowdown in the United States could drag the country into recession. Mexico sends around 80% of its exports to the US. The Mexican peso lost 0.75% and closed at 13.25 to the US dollar.

Argentine stocks also tumbled for a fourth straight session on Wednesday, sliding on investor concerns the global economy is heading into a recession, while the peso and bonds also fell.

The benchmark Merval index plunged 5.49% to 1,008.26 points. On the foreign exchange market, the Argentine peso closed lower, its slide partially offset by intervention by the central bank. The peso currency weakened 0.15% to 3.3025/3.305 per dollar in formal inter-bank trade but 1.5% to 3.37/3.40 in money exchange houses.

Chilean stock indexes also experienced a downfall on Wednesday, while the peso gained ground against the US dollar after the central bank auctioned US$ 332 million in loans to banks.

Chile's blue-chip IPSA index .IPSA slid 3.53% to close at 2,476.46 while the all-market IGPA index .IGPA fell 2.75% to 11,790.69, preliminary closing figures showed.

Furthermore prices for copper, Chile's leading export and a pillar of the local economy, eased to a three-year low on Wednesday as inventories rose and investors fretted about sluggish demand.

LatAm markets were impacted by US stock indexes which ended down 5% as major companies cut earnings outlooks and the US Treasury backed off plans to buy troubled mortgage assets.

The US top electronics retailer, Best Buy warned the business climate was the worst in 40 years. On Monday, Circuit City, the second-largest US consumer electronics retailer, filed for bankruptcy.

Analysts agreed that comments from US Treasury Secretary Paulson spurred investors to dump emerging market assets and flee to safer investments like US Treasury bills.

Mercopress

Tags:

You May Also Like

Another Confirmation of Brazil Government’s Graft Scandal

A former BrasÀ­lia (capital of Brazil) deputy governor revealed it was known that members ...

Brazil’s Newest Congress Scandal, the Bloodsuckers, Involves Ambulances

Brazil’s Federal investigators and the police have unveiled a new scam involving members of ...

Brazil Never Saw Such Promising Economy, Says Lula

Brazilian President Luiz Inácio Lula da Silva praised the government’s economic policy. In a ...

Making It There

It is believed that for every Brazilian who makes it big in the United ...

No Use to Complain, Brazil. Retaliate!

The only way for Brazil to reduce the barriers imposed on our export products ...

Brazil Needs US$ 31 Billion to Finance Crop

Brazil’s Superior Council of Agriculture and Livestock Raising (Rural Brasil), integrated by representatives of ...

Rio’s Christ the Redeemer, One of the Modern World’s 7 Wonders, Is 80

On October 12, the same day Brazilian Catholics honored their patron saint, Nossa Senhora ...

Brazil’s Petrobras Lowers Investments in the Next Four Years to US$ 138 Billion

Petrobras, the Brazilian state-controlled oil and gas multinational, disclosed that its board of governors ...

Finn Country

What matters is that you’re going to die. I don’t know how, but you’re ...

Brazil Puts a Brake on Interest Cuts. Key Rate Left at High 11.25%

Putting an end to a monetary policy distention which begun over two years ago, ...