Bargain Hunters Give Brazilian Market a Boost

Latin American stocks were mixed, with Brazilian shares climbing on bargain hunting following recent losses stemming from concerns about rising U.S. interest rates.

Meanwhile, Argentine issues dropped after the country’s central bank cautioned that it could more closely monitor the simultaneous buying and selling of securities.

Brazil’s Bovespa Index jumped 452.58 points, or 1.21%. Mexico’s benchmark Bolsa Index inched up 16.99 points, or 0.09%, while Argentina’s Merval Index fell 13.07 points, or 0.72%.

Brazilian stocks sank, as investors went in search of bargains following the market’s steep drop Tuesday, March 21, on concerns about rising U.S. Treasury yields and worries the U.S. Federal Reserve will continue its monetary tightening campaign longer than expected.

Shares have also been pressured recently by renewed political corruption worries. In testimony before a congressional investigative committee, witnesses recently linked Finance Minister Antonio Palocci to an alleged ring of lobbyists and political party leaders accused of bribery and campaign-finance violations.

Opposition leaders have been calling for his resignation. Meanwhile, Palocci has repeatedly denied any involvement in the alleged scandals. Earlier this week President Luiz Inacio Lula da Silva defended Palocci, saying he will stay on as Finance Minister.

In corporate news, oil giant Petrobras said it rejected a recent claim by Rio de Janeiro state that it owes the state government 800 million reais in special royalty arrears.

Telecom firm Telemar was in focus after the Brazilian securities commission (CVM) said it has approved an issue of non-convertible debentures worth 2.16 billion reais by Telemar. Last month, the company announced its intention to issue a debenture totaling just 1.6 billion reais, but it later decided to increase the offer due to strong demand.

Mexican shares managed to squeeze out small gains on the day toward the end of the session, coming back from intra-day losses. The market was closed yesterday for a holiday. Profit-taking was in full swing early on during today’s session, as the key IPC index has seen a string of consecutive gains, including two-straight record breaking sessions. Positive U.S. trading aided Mexico’s turnaround, as did strong domestic retail sales.

Meanwhile, investors are expecting the Bank of Mexico to continue to ease interest rates this coming Friday. Today, the National Statistics Institute, or Inegi, announced that retail sales grew 3% in January from a year ago and were up 2.04% from December on a seasonally-adjusted basis.

Argentina moved lower, despite some strong economic indicators in the form of the GDP and current account surplus. Investors instead focused on a warning from the central bank that it could monitor the simultaneous buying and selling of securities more closely.

On the economic front, the national statistics agency, or INDEC, said that the current account surplus for the fourth quarter of last year came in at US$ 1.482 billion, bringing the surplus for full-year 2005 to US$ 5.407 billion.

Elsewhere, INDEC said that January’s gross domestic product rose 9.1% from a year ago and was unchanged from December 2005. The year-over-year growth rate came in well above analyst expectations.

State-owned bank Banco de la Nacion SA announced that its past-due debts declined by 58% in 2005 to 988 million pesos. As of December 31, the bank’s total assets are 46.03 billion pesos, of which 2% account for past-due debts.

Thomson Financial – www.thomsonfinancial.com

Tags:

You May Also Like

A German Ring in the Brazilian Rainforest

On the evening of May 7, 2005, darkness engulfed the ornate auditorium of the ...

Sheik Jihad Hammadeh

Brazil’s Veja Magazine Caught in Islam Cartoon Flap. Sheik Calls for Boycott

Sheik Jihad H. Hammadeh is used to receiving phone calls from confused Brazilian journalists. ...

Post-Holiday Season Brings Smooth Upswing to Brazil Market

Latin American stocks were mixed, with Brazilian stocks taking the lead with gains. Meanwhile, ...

Brazil’s Trade Surplus Keeps Growing. It’s Already Over US$ 31 Billion.

Brazilian shipments abroad resumed their growth pace last week, when the country exported products ...

Without Arraes, Brazil’s Left Is Completely Orphaned

Without Leonel Brizola, without Luis Carlos Prestes, without Darcy Ribeiro, without Celso Furtado, without ...

A Crash Course on Brazil and Its Endless Efforts to Save the Northeast

The twenty-five-watt bulbs in the hotel didn’t emit light enough to read so I ...

FAO’s Map Is Not Pretty Picture for Brazil and the Amazon

Expanding livestock production is one of the main drivers of the destruction of tropical ...

Brazil’s Gol Reduced Fares Flying High

Gol, Linhas Aéreas Inteligentes, Brazil’s low-fare, low-cost airline, is celebrating the success of its ...

The Whole World Is Mad, But Brazil Has Lost Its Capacity for Indignation

During the military regime, some Brazilians abroad dared to denounce the torture occurring in ...

New Brazil’s Envoy to Algeria Mission: Reduce Brazilian Trade Balance Deficit

Henrique Sardinha Pinto, the head of the Commercial Promotion Department of the Brazilian foreign ...