• Categories
  • Archives

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

Ethanol: With an American Friend Like This Brazil Needs No Enemies

In a recent letter to President Obama, the Republican Senator from Iowa, Charles Grassley, ...

Led by Mineral Extraction, Brazilian Industry Is Pulling Economy Up

Industry was one of the main bases of growth for the Brazilian Gross Domestic ...

Asia’s Need for Food Gives Brazil’s Rio Grande do Sul a Boost

The southernmost Brazilian state of Rio Grande do Sul saw its exports grow 22% ...

In 2007 Brazil Exports Grew 17% to US$ 161 Billion and Imports, 32%

Exports from Brazil generated US$ 160.65 billion in 2007, exceeding the government forecasts of ...

Oil Rich Venezuela and Brazil Get Ready for War. But Against Who?

In recent years President Hugo Chávez has become Washington's ultimate Latin American nemesis, with ...

Google, Hottest Internet Property in Brazil with 27 Million Visitors a Month

Brazil access to the Internet is growing in a fast pace. New numbers from ...

Lula’s Answer to Belo Monte’s Friendly Fire: We Can Do It Alone

Brazilian president Luiz Inácio Lula da Silva declared that the Belo Monte power plant ...

First Quarter Earnings Reports Drive Brazilian Stocks to Record Day

Latin American stocks advanced, with Brazilian shares getting a boost from optimism about local ...

Against All Odds Japan Gets Ready to Beat Brazil in the World Cup

Putting a brave face on a grim outlook, Japan’s coach Zico says his players ...

Brazil’s Lula Summons His Cabinet for Summit on Inflation Blues

According to Brazil's largest circulation daily, Folha de S. Paulo, Brazilian President, Luiz Inácio ...