Market Lower in Brazil Amid Fears of Higher Interest Rates

    Brazilian equities declined further, pressured by interest rate fears and additional profit taking. Brazil’s market suffered from concerns over interest rate hikes at home and abroad with the U.S. earnings season getting underway this week.

    Brazil’s benchmark Bovespa Index dropped 455.33 points, or 1.84%. Brazilian shares plunged, amid projections for local and foreign interest rate tightening.


    The latest declines follow a slump last week after U.S. Federal Reserve officials sent out warning signals related to potential rising inflation in the U.S.


    Some analysts believe that Brazil’s central bank will have difficulty easing monetary policy this year amid a rate-tightening environment overseas, with the bank having boosted rates by 1.75 percentage points since September to limit accelerated core inflation.


    On that front, a Brazilian central bank market survey released early today suggested it would likely be forced to hike the benchmark Selic interest rate by up to half a point to 18.25% annually at its January meeting. Previous surveys had forecast a quarter-point increase.


    Turning to research notes, a major investment bank cut its rating on Brazilian phone company Embratel Participações SA to “underweight” from “neutral,” calling the fundamental outlook poor despite the recent takeover by Mexico’s Telmex.


    The bank commented that despite initial expectations, there are now “strong indications” that Telmex will not make an offer for Embratel’s preferred shares and American Depositary Receipts anytime soon, which “removes the single biggest potential catalyst we saw for Embratel shares.” Embratel’s stock tumbled.


    Thomson Financial Corporate Group
    www.thomsonfinancial.com

    Tags:

    • Show Comments (0)

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Brazilian congress in session

    While Brazil Seems in a Civil War Congress Only Cares for Pay Hike

    No one feels any nostalgia for the last congressional session. Mensalões (monthly payments for ...

    Not So Modest Plan: To Make Brazil World’s Largest Organic Food Producer

    Brazil will be the theme of the world’s largest natural food fair, the BioFach, ...

    Erasing the National Memory in Brazil

    Due to lack of funds, São Paulo’s TV Cultura has been reusing old videotapes ...

    Gay couple

    Evangelical Caucus in Brazil Congress Wants Psychologists to Be Able to “Cure” Gays

    Led by representative João Campos (from the PSDB party of Goiás state), the president ...

    Outlandish

    Outlandish UFOs are all the rage in Brazil these days. One of the most ...

    Brazil’s Big and Small Companies Want a Deal with Arabs

    Three hundred Brazilian companies are participating in business roundtables with importers from Iraq, Jordan, ...

    Suppose Lula Is Impeached. It Won’t Be a Nice Picture in Brazil.

    What everybody in Brazil is talking about, this week, is not  the explanation given ...

    Brazilian jet Embraer 175

    Embraer’s Deal with Brazilian Airline Might Go Over US$ 1 Billion

    Brazilian aircraft manufacturer Embraer announced it has signed a contract with Brazil's airline Trip ...

    Cisco in Brazil

    Brazil Breaks Smuggling and Tax-Evasion Scheme Involving US-Based Cisco

    US-based Cisco, a multinational that designs and sells communications technology, and over 30 Brazilian ...

    Arab Summit in Brazil Condemns, But Doesn’t Define Terror

    Heads of state and other officials from 34 nations met this week for the ...