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.Â
3.9 billion reais (US$ 1.69 billion) changed hands.Â As for the dollar, the American currency had a big jump rising 3.4% to 2.368 for a dollar.Â 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.