78% Up in 2009: China and Commodities Surge Boost Brazil Market

Brazil's Bovespa The Brazilian stock market, Bovespa, went up, this Thursday, October 15, for the fifth consecutive day, extending recent rallies and ending at fresh highs not seen in more than a year. The main São Paulo stocks index ended 0.76% higher at a 16-month high of 66,703 points. The financial volume was 6.34 billion reais (US$ 3.73 billion).

The index grew 4.11% this week, 8,43% this month, and 77.64% this year. The main contributors to this rally are Petrobras PN (up 1.24% to 36.60 reais), Vale PNA (up 0.69%, to 40.69 reais).

For a few minutes the dollar went down to 1.69 Brazilian reais. Foreign inflow of capital and the perspective of the new IPOs (Initial Public Offerings) have depressed exchanges since September 3 2008.
Brazil's real closed at 1.703 reais to the dollar, a 1.38% decline.

On Wednesday, traders noted the local stocks index began the session moving higher following an enthusiastic reaction to upbeat earnings reports abroad, where heavyweight bank and technology sector players JPMorgan Chase & Co. and Intel Corp. posted encouraging third-quarter results. Furthermore Citigroup raised its year end target for Brazil Bovespa's index to 70.000

Highly sensitive to metals and food exports, rising international commodities prices continued to provide support for major local players in the Brazilian market.

The market was also boosted by the announcement from Vale Doce SA, the world's largest iron ore exporter that it had reached an agreement with the state of Minas Gerais. It also was revealed that they are in negotiations with the Chinese to sell them iron.

The agreement unveils projects to develop and expand its production capacity in the Minas Gerais state in order to meet the growing global iron ore demand. These projects are Apolo, Conceição Itabiritos and Vargem Grande, whose investments are estimated at approximately 9.5 billion reais, approximately 5.6 billion reais.

The Dow Jones Industrial Average on Wednesday topped the 10,000 mark for the first time in a year. World markets were boosted by the news that US bank JP Morgan Chase reported a better-than-expected profit in the July-to-September quarter.  The Dow closed 0.47% up at 10,062.

Bzz/MP

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