Good Financial News in Brazil Makes Stocks Soar

Latin American stocks gained ground, with Brazilian stocks posting some of the region’s biggest gains, as tame inflation data boosted hopes that Brazil’s central bank will aggressively cut interest rates next week. Meanwhile, Mexican issues rose amid strength on Wall Street and upbeat sales results from Walmex.

Brazil’s benchmark Bovespa Index jumped 479.85 points, or 1.66%, while Mexico’s benchmark Bolsa Index gained 156.96 points, or 1.04%. Argentina’s Merval Index fell 4.11 points, or 0.25%.


Brazilian stocks advanced amid more upbeat news on the inflation front. The private Getúlio Vargas Foundation reported that Brazil’s General Price Index fell 0.56% in the first 10 days of September, a faster decline than the 0.36% drop in the first 10 days of August.


The continued tame inflation data follows gloomy industrial production figures yesterday, adding to expectations the central bank will move aggressively to cut interest rates at its next meeting on Wednesday. Analysts expect the bank to cut the Selic rate by as much as 50 basis points.


Meanwhile, Brazil’s ongoing political scandal was back in focus after a restaurant owner testified that he paid bribes to Severino Cavalcanti, the president of the Lower House. Sebastião Buani, who held a restaurant concession in Brazil’s Lower Chamber of Congress, said he paid Cavalcanti in order to obtain and renew the concession. Cavalcanti denied the allegations.


Elsewhere, Mexican shares resumed a recent rally following a spate of profit taking yesterday. Shares were supported by strength in the neighboring U.S. market amid hopes for a pause in the U.S. Federal Reserve’s cycle of interest-rate hikes.


Among individual issues, Wal-Mart de Mexico jumped after the retail giant reported a 4.6% rise in same-store sales in August from a year earlier. Total sales rose 12.8% to 13.05 billion pesos. A brokerage house said in a report that it expects continued robust results from Walmex for the rest of the year.


Meanwhile, media conglomerate Televisa said that it is looking for ways for shareholders to sell certain types of shares that rarely trade.


On the economic front, the Bank of Mexico left its monetary policy unchanged on Friday and made no statement on interest rates. Late last month, the central bank left the corto unchanged, but allowed the overnight rate to fall 25 basis points to 9.50%.


Argentine stocks dipped, as investors took some profits after the market hit a fresh record high yesterday amid a dearth of catalysts.


Thomson Financial Corporate Services – www.thomsonfinancial.com

Tags:

Ads

You May Also Like

After 44 Back-to-back Days of Rain São Paulo Goes in State of Attention

São Paulo city, in the Brazilian Southeast, had today its 44th consecutive day of ...

Brazilian Real Hits 35-Month High Against Dollar

Brazilian and Latin American equities turned lower on the day, after a substantial ascent ...

Old Plan, Old River

California and Israel have been used as inspiration for several irrigation plans in the ...

Brazil Gets New Aviation Chief Amid Growing Airport Chaos

Brazil's president fired his defense minister, who is also the civil aviation chief, on ...

Beware Brazilian Food

In the south of Brazil, some farmers have been illegally cultivating genetically modified soy. ...

100 Countries in Brazil for Talks on Corruption and Money Laundering

Brazil’s Minister of Control and Transparency, Waldir Pires, of the Federal Comptroller-General’s Office (CGU), ...

Brazil Joins 7 Amazon Neighbor Countries to Manage Common Water

An international project will promote the integration of eight different countries in the Amazon ...

Brazil’s True Energy Lesson: Making Oil Production a Priority

Advocates of Brazil's energy policies often cite Brazil's increased ethanol use as a reason ...

The Twilight of the Gods in Manaus

A German Ring in the Brazilian Rainforest: Part II

For the record, the Brazilian operatic event of the year – the Teatro Amazonas’ ...

Sky Is Falling over Varig

Varig will keep its name, but very little more, after its merger with TAM ...