Another Scary Day in Brazil: Markets Down 11%

Bovespa, Brazil Brazilian shares plummeted more than 10% on Wednesday, October 15, triggering a trading halt, for half an hour, as mounting fears of global recession battered markets worldwide.

Brazil's currency the real also skidded 4.53% lower to 2.19 per dollar from 2.095 on Tuesday, despite a one billion in dollar-selling intervention by the Brazilian central bank.

Brazil's benchmark stock index crumbled after notching a 17% gain the two previous sessions, with heavyweights Petrobras and Vale posting big losses along with major banks.

The Bovespa index of the Sao Paulo stock exchange slumped to 37,412.54 in afternoon trade, prompting an automatic 30-minute trading halt, after ending Tuesday at 41,569.03. It continued its slide after trading resumed, for a loss of 11.04%.

It was the fourth halt due to a 10-percent fall since the start of last week.

Brazil, Latin America largest economy, has been exposed to the global crisis with many investors fearing that its once-promising emerging-market status could be in for a rough time with declining commodity prices.

Meantime in neighboring Argentina the Merval index plunged 12.14% on Wednesday, the highest one day drop since September 1998. So far in October the Merval has lost 25.81%. The collapse follows Tuesday strong recovery of almost 11%.

In Chile the closing fall was almost a victory after having slid 2%: the IPSA index was up 0.40% and the IGPA was down 0.48%. However the Chilean peso lost against the US dollar which again was up to 625.

But in Peru and is spite of a report indicating the economy was steaming ahead at 9%, fears about a world recession plunged the local stock exchange. The IGBVL lost 8.56 and the ISBVL, 10.96%

Mercopress

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