Brazilian Market Volatile Mirroring the U.S.

    Brazilian and Latin American markets ultimately finished lower on the day, after see-sawing between positive and negative territory for much of the session. Shares initially benefited from cooling U.S. inflation concerns, amid yesterday’s release of the FOMC minutes from the March meeting and today’s weaker-than-expected retail sales report for March.

    Still, despite receding oil prices, U.S. stocks turned lower in the latter half of the day, followed by Brazilian and Mexican issues. Meanwhile, Argentine issues continue to falter ahead of the resolution of the nation’s debt restructuring.


    Brazil’s benchmark Bovespa Index receded 140.10 points, or 0.53%, while Mexico’s benchmark Bolsa Index tumbled 97.87 points, or 0.78%. Argentina’s Merval Index slumped 28.03 points, or 2.04%.


    In economic reports, the International Monetary Fund boosted its economic growth forecast for Latin America and the Caribbean to 4.1% in 2005 from its prior outlook of 3.6% growth. Domestic demand was one of the key reasons for the brighter outlook.


    Brazilian shares turned decidedly lower in the later half of the session. Yesterday’s U.S. FOMC minutes and today’s weaker-than-expected U.S. retail sales report, both indicating tame U.S. inflation, failed to keep Brazilian shares positive.


    Traders also overlooked oil’s recession toward US$ 50 a barrel. U.S. weekly inventory data showed larger-than-expected builds in both U.S. gasoline and crude inventories last week.


    Turning to corporate reports, state-run oil firm Petrobras SA announced that it will spend US$ 6.1 billion from 2004 to 2010 to expand its gas pipelines in Brazil, as both household and industry demands increase.


    Meanwhile, the airline industry continues to share market focus. A major investment group upgraded Gol Linhas Aereas Inteligentes SA to “buy” from “neutral,” due to the firm’s promising risk/reward scenario, partly stemming from the firm’s revised plan to add to its fleet.


    Separately, the region’s largest domestic airline, TAM SA, expects to raise between 800 million and 900 million reals through primary and secondary stock offerings this year, according to Valor Econômico.


    Mexican shares declined on the session, as weaker U.S. retail sales represent a negative for the region. The vast majority of Mexican exports are sent to the U.S.


    In corporate reports, Petroleos Mexicanos announced that it needs to spend at least US$ 1.5 billion a year on exploration if it is to reach its medium-term reserve replacement targets.


    Petroleos Mexicanos said that the investments should allow the firm to reach its 100% replacement goal for total reserves by 2010.


    Elsewhere, miner Southern Peru Copper, in which Grupo Mexico SA owns a 75.1% stake, said that it will pay a dividend worth about US$ 2.38 per share on May 13 to shareholders on record April 29.


    Argentine shares continued to buckle under the weight of the debt restructuring. The International Monetary Fund warned that Argentina’s government needs to re-establish relations with international capital markets and resolve problems within its utility sector if the nation wants to sustain its economic recovery.


    To that extent, Argentine Planning Minister Julio De Vido is set to visit Bolivia next week in a bid to negotiate natural gas prices. Bolivia currently delivers 7.7 million cubic meters of gas to Argentina a day.


    The current price rate is US$ 2.08 per million British thermal units. Last  month, Bolivia’s Energy Minister indicated the region wants to potentially double that rate.


    Thomson Financial Corporate Group
    www.thomsonfinancial.com


    PRNewswire

    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

    Corn from Brazil

    Brazil Expecting Largest Crop Ever Led by Soy, Corn and Rice

    Brazil's agricultural producers should have their largest harvest ever in the 2007/2008 grain crop, ...

    Penis Growing Pains

    Brazilians have a normal size penis, but this does not prevent many of them ...

    Concentration of Land Makes No Sense, Says Brazilian Government

    According to the Executive Secretary of Brazil’s Ministry of Agrarian Development, Guilherme Cassel, the ...

    Brazilians in Argentina for the Anti-Bush Counter Summit of the Americas

    Social movements, non-governmental organizations (NGOs), figures associated with the human rights struggle, and intellectuals ...

    Arno Augustin

    Brazil Waiting for a More Stable Market to Issue Bonds Overseas

    Brazil's National Treasury secretary, Arno Augustin, on disclosing financial results for November, said that ...

    Brazil Opposes International Accord on Forests

    The United Nations Forum on Forests met today to continue its discussion on the past, ...

    Brazil, Land of Carnaval and Scandal

    Brazilian politics is so rife with scandals that teams of journalists could spend the ...

    The Lula-cheering crowd has disappeared from the Brazilian streets

    An Autopsy of the Corruption That Sapped Brazil’s Ruling Party

    "Hear me, citizens of Brazil, senators, and deputies…"Thus commenced the televised coverage of the ...

    Brazilians in the West Bank Might Not Be Able to Vote for President

    There are currently 93 electoral zones abroad, some of them comprising more than one ...

    Brazil: How Desperate Is Sí£o Paulo’s Mayor?

    Marta Suplicy (PT) has been defending the tone of her campaign, including the attacks ...