Brazil Market Sputters Ahead

Brazilian and Latin American markets were in the black, but pulled back from earlier highs toward the end of today’s session. Investors cheered a recession in record-high crude oil prices, which also greatly benefited U.S. shares.

Brazil and Mexico added to yesterday’s gains, while Argentina continued to drift south on low volume.


Brazil’s benchmark Bovespa Index advanced 35.27 points, or 0.14%, while Mexico’s benchmark Bolsa Index rose 68.34 points, or 0.51%. Argentina’s Merval Index gave up 1.61 points, or 0.11%.


In major U.S. economic reports, the consumer confidence index jumped to a three-year high of 105.8 in June from a revised 103.1 in May. Economists had expected confidence to climb to 105.0.


Brazilian issues continued to advance, alongside confidence in U.S. markets. A decline in crude oil prices also comforted investors, as Brazil is a net importer of the commodity.


In corporate news, a U.S. federal bankruptcy court handed down a preliminary injunction that prevents creditors from seizing Varig’s leased aircraft.


A hearing is set for September 12 to review the preliminary injunction, as long as the air carrier continues to maintain the necessary payments on the aircraft.


Meanwhile, a major investment bank lifted its price target on state-run oil firm Petrobras to US$ 62 from US$ 51, as it believes the firm’s fundamentals will remain strong next year.


Turning to deal reports, flat-steel maker Usiminas said it may purchase at least 10% in of the steel firm being formed by Argentina’s Techint.


The new firm, which will include Techint’s recently acquired Hylsamex, will be Latin America’s largest steel producer with annual revenues reaching US$ 5 billion.


Mexican issues continued their upward momentum today, bolstered by a strong consumer confidence reading in the U.S., as that country is a critical trading partner for Mexico.


Also, Finance Minister Francisco Gil Diaz said the Mexican economy is set to meet the government’s 2005 growth target of 3.5% to 4%.


Airline holding company Cintra surged, as a brokerage initiated coverage on the firm with a “buy” rating. The government plans to launch a tender process for Cintra’s privatization, beginning in early July.


Also, Cemex announced that beginning tomorrow, trading in its Ordinary Participation Certificates and American Depositary Shares will reflect its previously announced stock split.


Argentine shares turned downward late in the session on low volume. Investors had a batch of economic reports to contend with. Economy Minister Roberto Lavagna announced last night that Argentina will commence talks with the International Monetary Fund regarding a new financial accord on July 16.


Indec, the national statistics agency, said that the final reading for industrial production showed an 8.5% jump in May from the year-earlier period and a 1.2% advance from April. May’s capacity utilization rate edged down to 70.6% from 70.9%.


Meanwhile, Argentina’s formal private sector employment rate advanced 0.8% in May and 8.8% from the year-earlier period. Separately, Torcuato di Tella University reported that confidence in the local government declined 3% in June from last month. The most recent decline brings the confidence index down to 2.31 from 2.37 in May.


Thomson Financial Corporate Group – www.thomsonfinancial.com

Tags:

Ads

You May Also Like

Brazil Exports 2.6 Billion Liters of Ethanol

Brazilian ethanol exports, which amounted to 2.6 billion liters in 2005, have been growing ...

Firebrand Extraordinaire

I’m Crazy for You, America By Liana Alagemovits Brazilian Press Trying to describe Caetano ...

Killing of Brazilian Was Terrible Mistake, Says London Police

The Metropolitan Police of London accepts "full responsibility" for the death of Jean Charles ...

Brazil Shows Arabs How to Sell More Oil by Buying Brazilian Ethanol

Promoting ethanol on the international level has been an integral part of the Brazilian ...

For Brazil’s Minas State, Arabs Mean Big Business

Bilateral trade between the Arab countries and the Brazilian state of Minas Gerais (known ...

All Brazil Needed: An American Martyr!

There are cadavers and cadavers, isn’t it true? Some are sacred. Others aren’t worth ...

After All-Time High, Brazilian Market Tumbles

Brazilian and Latin American bourses fell on profit taking this Friday. In the U.S., ...

Brazilian Indians Let All Hostages Go After Protests Against a Dam

A group of Brazilian Indians who had occupied the construction site of a hydroelectric ...

Brazilian Indians Lose their Roadside Camp to Fire and Are Threatened with Death

A fire has raged through a Guarani roadside camp, in Brazil, forcing the Indians ...

It’s Carnaval! Free Condoms For All in Brazil.

Using the slogan “Get dressed, always use a condom,” Brazil’s campaign to combat Aids ...