After seven consecutive days of losses, which totaled more than 20%, the Bovespa, Brazil's stock exchange, came back with a roar, gaining 14.66% this Monday, October 13, the biggest jump since January 15, 1999 when Brazilian stocks surged 33.4% in a single day.
The market traded 5.24 billion reais (US$ 2,44 billion) during the Monday session and closed at 40,829 points. On Friday the Ibovespa fell 3.97% accumulating 44% in losses for the year.
Banks shares led the way and none of the 66 stocks that make up the Ibovespa (the Bovespa index) ended up in the red. Itaú and Unibanco banks saw their stocks up by over 20%. Blue chips Petrobras, the state-controlled oil multinational, and mining company Vale went up 12% and 13%, respectively.
Brazil got the buying fever as the rest of the world after several countries announced measures to inject more capital in their financial system. Europe alone promised to use over US$ 2 trillion to deal with the problem, ten times as much as the US with an economy similar to the whole of Europe is willing to bring in.
In the US, the Dow Jones went up 11.08%, in London the FTSE-100 advanced 8.26%, in Paris the CAC-40 climbed 11.18% while Frankfurt's DAX moved 11.40% in positive territory.
The dollar, which had dramatically zoomed up last week tumbled 7.74% on Monday, closing at 2.14 reais per dollar. This was the biggest spill for the greenback since August 2002. The dollar had surpassed 2.30 reais last week.
The Brazilian Central Bank promised Monday that it is going to inject over 100 billion reais (US$ 47 billion) in the market through changes in the banks compulsory deposits rules.
The Brazilian trade surplus, i.e. positive result for exports minus imports, reached US$ 411 million in the second week of October and US$ 540 million so far this month.
In the accumulated result for the year, the trade surplus remains lower than in the same period of 2007: US$ 20.196 billion as against US$ 32,487 billion. The reduction is the result of imports growing at a faster rate than exports.
In October, exports totaled US$ 6.848 billion and imports, US$ 6.308 billion. In the accumulated result for the year until now, exports total US$ 157.716 billion and imports, US$ 137.520 billion.