• Categories
  • Archives

Rumors About Brazil’s Chief of Staff Stepping Down for Corruption Shake Market

Latin American shares witnessed a mixed session, as Brazil turned lower today, following yesterday’s rally.

Still, Mexico surged on the session, as some upbeat economic reports from the U.S. were a positive for domestic issues. Argentina also climbed on the day.


Brazil’s benchmark Bovespa Index receded 262.86 points, or 1.02%, while Mexico’s benchmark Bolsa Index surged 158.41 points, or 1.19%. Argentina’s Merval Index advanced 18.38 points, or 1.28%.


Some upbeat U.S. economic data aided select emerging markets. A lower-than-expected consumer price index report indicated tame inflation.


Factory activity in New York was robust in June, while May’s industrial production and capacity use figures were above expectations.


Also, the Federal Reserve said in its latest Beige Book report that economic activity expanded at a decent pace in the last two months.


Brazilian shares returned some of the gains earned in yesterday’s session. Yesterday, investors were enthused by congressional testimony by Congressman Roberto Jefferson that did not reveal concrete evidence of bribery by certain Workers’ Party members.


Still, investors are also aware that the government’s investigation into bribery allegations has only just begun.


Also, news services continued to indicate Presidential Chief of Staff Jose Dirceu may be replaced due to his alleged involvement in the bribery scandal.


On the economic front, Brazil’s Central Bank is set to decide on interest rate levels this evening. Economists are hoping the Selic base interest rate will be held steady at 19.75%, following nine-consecutive rate hikes.


Also pressuring Brazilian shares was a spike in oil prices, which closed just below US$ 56 a barrel. Spurring the advance was the U.S. Energy Department report that U.S. crude supplies declined 1.8 million barrels in the week ended June 10, while gasoline supplies fell 900,000 barrels.


Distillate stocks rose 2.5 million barrels. Meanwhile, the Organization of Petroleum Exporting Countries decided to raise its current production ceiling by 500,000 barrels a day to 28.0 million barrels a day, although the move was widely expected.


Brazil can be sensitive to oil price fluctuations, as it is a net importer of oil.


On the corporate front, a major brokerage firm upgraded drinks company AmBev to “peer perform” from “underperform,” as it is unlikely the unit of Belgium’s InBev will partake in the bidding for Colombia’s Bavaria.


The brokerage also stated, “AmBev is a defensive consumer staples stock with excellent management, which should hold up well in the face of extant political risk in Brazil.”


Meanwhile, Mexican shares moved solidly higher, aided by the telecom sector, among others. In corporate reports, homebuilder Homex’s shareholders are set to vote on June 30 on the proposed US$194 million purchase of Controladora Casas Beta.


Elsewhere, retailers were mostly positive on the day. The National Association of Supermarkets and Department Stores, or Antad, said that sales rose 6.6% in May compared to the corresponding period a year ago. Meanwhile, same-store sales at supermarkets declined, while department and other retail sales advanced.


Argentina’s market also posted gains. Investors are awaiting some key economic reports due out tomorrow in the form of first quarter GDP and industrial production data.


Separately, the country’s auto mechanics union reached wage agreements with domestic units of Ford and DaimlerChrysler. The Labor Ministry reported that discussions with Volkswagon are still underway, but an agreement is expected later this evening.


Thomson Financial Corporate Group – www.thomsonfinancial.com


PRNewswire

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Offers Free Morning-After Pills to Deal with 1.4 Million Illegal Abortions

Brazil's Health Minister, José Gomes Temporão, has indicated that the Brazilian government intends to ...

Record Crop to Boost Brazil’s Sugar Exports by 17%

The record sugarcane crop that Brazil should pick this year opens perspectives for greater ...

Lula Relaxes Environmental Laws to Get Brazil Out of Low Gear

Brazilian President Luiz Inácio Lula da Silva plans to hire more people and modify ...

Brazil Has 96.6 Million Cell Phones, 80% of Which Are Prepaid

There are 96.6 million celular phones in operation in Brazil. The figure was disclosed ...

Divorces in Brazil Jump 46% and Set Record with Over 350,000 Untying the Knot

Brazil had a record-setting 351,153 divorces in 2011, 45.6% more than in 2010 and ...

For Lula, Israelis and Palestinians Need Someone to Tell Them the Truth

The president of Brazil, Luiz Inácio Lula da Silva, in an interview with Arab ...

Brazil: Boeing Tragedy’s Relatives Blame Legacy Pilots for the Gravest Mistake

Relatives of the victims of the Gol’s Boeing 737-800 accident in Brazil, which killed ...

Brazil: Corruption Is Just One of 7 Crimes Mensalão Defendants Are Charged with

Brazil’s Supreme Court (STF) finally began to judge the case of the “mensalão” (the ...