Brazilian and Latin America receipts posted modest declines, as strength in U.S. markets was unable to spur more interest in emerging markets. A smaller-than-expected U.S. trade deficit and tumbling oil prices helped boost U.S. stocks.
Meanwhile, indications of higher inflation in Brazil dampened market sentiment. Mexican issues also moved lower, while Argentine shares rebounded following a recent string of losses.
Brazil’s benchmark Bovespa Index ebbed 64.05 points, or 0.26%, while Mexico’s benchmark Bolsa Index slipped 32.59 points, or 0.26%. Argentina’s Merval Index recovered 19.12 points, or 1.38%.
The U.S. trade deficit narrowed to US$ 54.99 billion in March from a revised US$ 60.57 billion deficit in February. Analysts were looking for a much wider deficit of US$ 61.50 billion. During the month, imports fell despite a big jump in oil prices and exports rose to a record level. The deficit with China also narrowed.
Brazilian issues again slid lower, amid a higher-than-expected domestic inflation figure that could signal further rate tightening in the country.
Brazil’s IPCA Broad Consumer Price Index advanced 0.87% in April, up from 0.61% in March, according to statistics institute IBGE. The news boosted the 12-month IPCA rate for the year ended in April to 8.07% from 7.54% at March’s end.
The IBGE cited administered prices in urban transportation and food as part of the reason for April’s higher reading. The next central bank meeting for reviewing interest rate levels is set for May 17 and 18.
Amid telecom reports, mobile phone company Telemig Celular posted a lower-than-expected rise in its first-quarter profits to 32.77 million reais from 32.74 million reais in the corresponding period a year ago.
Net revenues arrived at 262.8 million reais, down 8.1% from last year’s 288.9 million reais. Also, EBITDA slipped to 97.2 million reais from 134.9 million reais.
Also, fixed line phone company Telesp said that a rise in prices and better broadband services revenues boosted its first-quarter profit by 17% to 489.9 million reais from a year ago.
The results were in line with analyst expectations. EBITDA advanced more than 8% to 1.53 billion reais, while the EBITDA margin climbed to 45.2% of net revenues from 43.3% a year ago.
Elsewhere, flat-steel maker Usiminas said that continued strength in demand and prices for steel helped lift its first-quarter net profit to 1 billion reais from 358.4 million reais in the comparable period last year.
Sales increased to 3.46 billion reais from 2.36 billion reais a year ago, while EBITDA rose to 1.72 billion reais from 921.1 billion reais.
On the research front, a major investment bank upgraded steel firm CSN to “peer perform” from “underperform,” as the company is “more defensive” compared to most of its global peers.
Mexican shares moved lower in quiet trading. Fallout from Televisa’s break with Univision yesterday continued to pressure the firm. Televisa’s chairman and executive vice president both resigned from Univision’s board. Televisa is also suing the firm for unpaid royalties.
Argentine issues rebounded from a recent bout of weakness. In corporate reports, Telecom Argentina said in a conference call that it expects operating profit margins to continue falling this year due to high operating costs and steep competition in the cellular industry.
Last night, the firm posted a net profit of 279 million pesos in the first quarter, up from 124 million pesos in the corresponding period one year before.
Thomson Financial Corporate Group
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