Brazilian stocks rose this December 28 adding to previous day’s already record highs on light volume. Providing support, the U.S. market climbed on U.S. consumer confidence data that bested expectations. Brazil’s benchmark Bovespa Index advanced 179.68 points, or 0.69%.
Brazilian issues rose, as foreign funds snapped up equities in unusually thin holiday trading. Traders noted that foreign funds were taking advantage of the relatively low Brazilian volume to bolster 2005 portfolios, which will be heavily weighted toward blue chips.
Analysts indicated that the rush of foreign buying was associated with Brazil’s promising economy.
On the economic front, Brazil’s central bank said IPCA consumer price inflation should end 2004 at 7.4% and slow to 5.3% in 2005, based on the assumption of a Selic interest rate maintained at 17.75% and an average exchange rate of 2.75 reals to the dollar.
In September, the central bank had forecast 2004 inflation at 7.2% and 2005 inflation at 5.6%. The reduction in next year’s inflation estimate was based on interest rate hikes and an appreciation in the exchange rate. Also, the bank released an outlook for 2006 inflation at 4.0%.
Shares of beverage giant AmBev climbed. The stock is likely to be among the winners next year, as Brazilians use their greater purchasing power on consumption of more beer and soft drinks.
Thomson Financial Corporate Group
www.thomsonfinancial.com
PRNewswire
