Tempered Optimism in Brazilian Market Rebound

Brazilian stocks rose thanks to a rebound in Brazilian issues. Yesterday, investors had reacted harshly to an interest rate hike by Brazil’s central bank after market hours on Wednesday, but this Friday Brazil’s benchmark Bovespa Index recovered 208.40 points, or 0.88%.

Brazilian shares climbed, in a technical rebound following recent declines. After this week saw the local Ibovespa index shed 5.3%, traders indicated that investors were following up some overdone selling, during which the Ibovespa hit two-month lows, with some bargain hunting.


Still, optimism was tempered by concerns that that Brazil’s central bank will continue to hike interest rates as it struggles to bring inflation in line with its 2005 targets.


The bank began raising rates in September, and with the benchmark Selic rate now at 18.25% per year, it is one of the highest in the world.


On the corporate front, shares of mining giant CVRD rose following an acknowledgement the firm is seeking a price hike from clients of up to 90% for iron ore this year.


Iron ore prices are negotiated every year between major producers and their foremost steelmaking clients. Strong Chinese demand has lifted iron ore prices, which surged nearly 19% in 2004 after a 10% rise in 2003.


Low-cost Brazilian airline Gol Linhas Aereas Inteligentes SA announced plans to inaugurate flights to Bolivia in the first half of 2005, for its second international route.


Gol began its first international route in December to Buenos Aires, Argentina. The carrier’s marketing and services vice president stated, “Gol’s successful operations in Argentina have proven that there is an opportunity to expand our business throughout South America.”


Brazilian mobile phone operators recovered following indications that the price they get for receiving calls from fixed lines may increase in 2005, while many had been anticipating no change or even a decline.


Turning to economic data, the private Getúlio Vargas Foundation reported that the Brazilian General Price Index rose 0.28% in the first 10 days of January, compared with a 0.63% increase in the corresponding period in December. The latest advance was shy of estimates for a gain between 0.30% and 0.50%.


Thomson Financial Corporate Group
www.thomsonfinancial.com


PRNewswire

Tags:

You May Also Like

Brazilian soccer fan in Germany

Brazil Can Win World Cups But It’s Far From Winning Nobel Prizes

Out of every ten of the world’s best soccer players, at least five are ...

Brazil Reaps US$ 32 Billion in Taxes in First Quarter

Federal tax and contributions collection in Brazil reached US$ 10.687 billion (27.989 billion reais), in ...

Brazil Answer to Fastest Growth in 2 Decades: Raising Interest Rates

 The chief of Brazil’s central bank, Henrique Meirelles, said he’s “confident” that Brazilian inflation ...

Brazil Gets Better Grade in Fighting Corruption But Still Fails

The latest report card for global corruption given annually by the London-based Transparency International ...

Renewed Appetite for Chicken in EU Boosts Brazil Perdigí£o’s Bottom Line

The revenues of food sector company Perdigão, a traditional Brazilian industry in the food ...

Frequent trouble with air traffic in Brazil has caused delays and long lines

By Killing Probe on Air Traffic, Brazil Misses Chance to Show Public Spirit

Despite the surprises and resentments related to the Brazilian cabinet reform, the subject in  ...

Bill to End Poverty in Brazil Puts Brazilians in Warring Mood

Brazilians are up in arms furiously firing emails to friends and acquaintances trying to ...

Brazil's Lula reelected

Brazil’s Lula Unlikely to Change Course after His Massive Victory

For better or worse, Brazil can now look forward to four more years with ...

Suspect Killers of Landless Are Put in Jail

Brazil’s Special Secretary of Human Rights, Minister Nilmário Miranda, informed that three of the ...

In Brazil, Man and Two Women Confess to Cannibalism and Selling Human Meat Pies

According to police chief Wesley Fernando, from Garanhuns, in the northeastern state of Brazil, ...