Brazilian stocks rose, ahead of what are expected to be solid fourth-quarter earnings announcements in the coming weeks. Still, investors remained somewhat cautious in anticipation of the release of the minutes from the Brazilian central bank’s most recent monetary policy meeting.
Brazil’s benchmark Bovespa Index strengthened 379.35 points, or 1.59%. Brazilian stocks strengthened, amid gains in the power and metals sectors.
Investors are looking cautiously ahead to minutes from the Brazilian central bank’s latest monetary policy meeting due later in the week. The bank is expected to make hawkish comments regarding inflation and interest rates after tightening monetary policy in January for the fifth straight month.
Still, investors are awaiting fourth-quarter earnings reports in the coming weeks that are anticipated to be generally positive. Brazil’s economy leapt in the second half of 2004, and local firms are now reaping the benefits of that expansion.
Additionally, Brazilian equities were supported by a Standard & Poor’s report that said the country’s macroeconomic prospects for 2005 look “solid.”
Shares of Brazilian electric power utility Copel soared, after the firm announced plans to raise prices by an average of 5% from February 1. The price increase reduces some of the discount awarded to customers that pay their bills on time.
Also, CVRD continued to rise, following its acknowledgement last week that the mining giant 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.
Thomson Financial Corporate Group