Obama Effect Sends Brazilian Stocks on an Over-9% High

Brazil's Bovespa The US rescue effort to save Citicorp coupled with Obama's cabinet picks, which had markets soaring in Europe and the United States also impacted in Latinamerica. Brazil's market was up over 9% on Monday recovering most last week's losses and the Mexican IPC rose 7%.

São Paulo's stock exchange, the Bovespa, shot up with Brazilian investors showing renewed enthusiasm with the economic decisions made in Washington and Wall Street. At the end of the day, the stock exchange's main index, the Ibovespa, had gone up 9.4%, closing at 34,188 points. 3.5 billion reais (US$ 1.5 billion) were negotiated.

Among the biggest winners were companies from the financial sector such as Unibanco and Itaú, which went up more than 15%. State-controlled oil multinational Petrobras and mining giant Vale, the two most traded stocks, also had a banner day gaining more than 14% in one day.

Meanwhile, the dollar fell heavily ending the day at 2.325 reais per dollar, a  5.41% slump. Brazil's Banco Central contributed to the fall by intervening in the exchange market. Brazil's monetary authority sold US$ 2.16 billion dollars in two swap auctions.

Argentina's Merval jumped 8.79%, the highest increase since October 14, helping to cut into last week's five days running losses of 18.95%.

In Chile the stock market reaction was more modest, 2%, but the Chilean peso made a strong recovery against the US dollar, as happened with the Brazilian real and the Mexican peso.

Monday's rally was marked by London's FTSE 100 Index of leading shares which soared by a record 9.8% or 372.1 points at 4153, the biggest percentage gain in its history. In Paris, the CAC 40 index jumped 10.1% and in Frankfurt the DAX advanced 10.3%.

On Wall Street, the key Dow Jones added almost 5% and the Nasdaq index gained 6% and S&P 6.74%, extending the rally seen on Friday.

Shares in Citigroup have jumped by almost 60% as investors welcomed the US government's rescue plan for the bank. The US Treasury is set to invest US$ 20 billion in return for preferred shares in the troubled banking giant.

In Britain, the government announced a stimulus plan that has temporarily cut VAT from 17.5% to 15% as part of a 20 billion-pound package aimed at kick-starting the economy.

Energy stocks also got a boost as the price of crude oil surged towards US$ 55 a barrel.

Mercopress/Bzz

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Your email address will not be published.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

With an Eye to the US, Brazil’s Lula Releases Reelection Platform in English

The Brazilian ruling party, the PT (Workers Party), has published a summary in English ...

Vatican Confirms: Pope Will Visit Brazil in May

Pope Benedict XVI will visit Brazil in May 2007. The news was confirmed by  ...

What Brazil Needs Are Real Jobs

The director of the International Labor Organization (ILO) in Brazil, Armand Pereira, affirmed that ...

Brazil’s Lula Is Against Reelection, But He’ll Run Again Anyway

In an interview with radio stations on Wednesday, December 8, Brazilian President Luiz Inácio ...

Brazil Getting from France Nuclear Submarine and Its Techonology

2021 is the year Brazil expects to have its first nuclear powered submarine. The ...

New Republic Celebrates 20 in Brazil

March 15 marked the 20th anniversary of the beginning of the country’s redemocratization, after ...

Kyoto Starts. Brazil Gives Example.

One of the internationally agreed mechanisms for reducing greenhouse gas emissions was set into ...

Brazil Mensalão’s Whole Story: Chronologically

May 10, 2005  A grainy black and white video is made public showing a ...

Lula Accused of Following on Chavez’s Steps in Dealing with Brazilian Press

Brazilian president Luiz Inácio Lula da Silva’s comments on freedom of the press are ...

Best-seller Books, Plays and Movies

By Brazzil Magazine PLAYS RIO Um Ato para Clarice (An Act for Clarice)—Monologue with ...