Brazil Market Down Under Clouded Political Skies

Latin American shares, much like their U.S. counterparts, gave up early gains and turned negative, yesterday. Ongoing political tensions in Brazil continued to cloud that market.

Meanwhile, after an early rise in U.S. markets due to upbeat guidance from Texas Instruments, stocks receded. The White House trimmed its 2005 gross domestic product growth estimate to 3.4% from 3.5% and raised its outlook for inflation acceleration to 2.9% from 2%.


Investors are also awaiting Federal Reserve Chairman Alan Greenspan’s congressional testimony regarding the U.S. economy, which is scheduled for today.


Brazil’s benchmark Bovespa Index gave up 324.60 points, or 1.30%, while Mexico’s benchmark Bolsa Index tumbled 45.37 points, or 0.35%. Argentina’s Merval Index slipped 1.01 points, or 0.07%.


Brazilian shares returned gains acquired early on in the session. Investors had few domestic corporate or economic reports to divert their attention from the ongoing political scandals.


The firing of two top officials at the Post Office and Reinsurance Institute by President Luiz Inácio Lula da Silva led some market watchers to believe that the corruption charges were being taken very seriously.


Also, Brazil’s congress is set to open an investigation into alleged corruption at the Post Office and other state-run firms this Thursday.


Mexican stocks also receded after an early rebound. Shares took some of their cue from U.S. market weakness.


In economic reports, the Finance Ministry announced that fixed investment grew 6.5% during the first quarter of 2005, compared to the corresponding quarter a year earlier. Higher investment in equipment and machinery positively impacted the bottom line. Investment rose 2.3% in March, versus a year ago.


Elsewhere, the Mexican Auto Industry Association said that auto production rose 5.6% in May, compared to the corresponding period a year ago, to 131,295 units. Exports increased 5.3% last month, while domestic sales rose 1.8%.


Amid brokerage reports, a major investment bank upgraded three Mexican soft-drink bottlers due to expectations for lower plastic bottle prices, which could boost the firms’ profit margins. The broker lifted its ratings on Coca-Cola Femsa, Contal and Arca to “buy” from “neutral.”


Argentine issues ended virtually flat, as there were few news items to spur meaningful trading activity. Spanish-Argentine energy firm Repsol-YPF confirmed that Bolivian protestors took control of three more small oil fields. The protestors are demanding the nationalization of Bolivia’s oil and gas industry.


Meanwhile, Argentina’s Ministry of Labor temporarily halted strikes by members of the national mechanics union at three major auto producers’ plants. Both sides will attempt to reach wage agreements by Monday.


Thomson Financial Corporate Group – www.thomsonfinancial.com


PRNewswire

Tags:

You May Also Like

For US Foundation Brazil Cannot Invoke Health Emergency to Break AIDS Drug Patent

With a number of other non-profit groups, ITSSD (Institute for Trade, Standards, and Sustainable ...

Lubricant factory Unioil in Diadema, São Paulo, Brazil

Brazil’s Industry Output Grows 3.8% in First Quarter

The Brazilian Institute of Geography and Statistics (IBGE) disclosed this Friday, May 4, its ...

Why Is Lula Crying? They Stole His Right to a Third Mandate

Power is a strong drug, it’s addictive and causes dependency. So much is known. ...

Brazil and China Launch Forest and Farm Monitoring Satellite

Today, September 18, will see the launch of the Chinese-Brazilian Earth Resources Satellite CBERS-2B, ...

Brazilians Hopeful Interest Rates Will Be Put on Hold

Brazil’s central bank today could interrupt an eight-month cycle of monetary policy tightening, according ...

For Brazil Justice Caving In to FIFA’s Demands Means to Issue a Banana Republic Certificate

Brazil’s Supreme Court (STF) is against the proposals made by Soccer’s International Federation, FIFA, ...

After 13 Years of Debates Brazil Approves Judiciary Reform

Last night, in a second vote, the Senate approved a Judiciary Reform bill which ...

Brazilian Airline Gol

Gol Airline Vows to Become Number One in Brazil by Year’s End

Brazilian airline Gol purchased Varig for approximately US$ 275 million. With the inclusion of ...

Another Step from Brazil Away from Gas Dependence on Neighbors

Brazil's first Liquefied Natural Gas (LNG) regasification plant was inaugurated this Wednesday, August 20. ...

Porno with redeeming value

CDs or Books by Keyword, Title or Author By "What’s the name of what ...