Brazil: Bovespa Down. Blame It on Petrobras.

Brazilian stocks continued south, yesterday, again mirroring a decline in the U.S. market. Brazilian shares slumped on Petrobras’ decision to boost fuel prices by a smaller-than-expected amount and inflationary concerns.

Brazil’s benchmark Bovespa Index crumbled 329.81 points, or 1.24%. Brazilian issues tumbled, following word that Brazil’s state-owned oil company Petrobras raised fuel prices much less than expected.


Petrobras announced plans to hike its refinery prices for gasoline by 2.4% and for diesel by 4.8% as of Friday. Analysts anticipated a hike based on the recent spike in world oil prices.


The last time Petrobras increased gas and diesel prices was in June. Still, another hike is predicted for later this year, as the latest increases were viewed as too small, compared with global crude prices.


Analysts, who predicted a price hike of about 10%, noted that the government could be avoiding larger rises before the second round of the municipal elections later this month.


While the price increases will likely affect Brazil’s inflation, concerns on that front were further driven by data from the University of São Paulo Fipe economic research unit.


That showed four-week inflation through October 7 of 0.27%, up from 0.21% in September, while transportation prices solidified 0.50% during the period, up from an increase of 0.44% in September.


Brazilian steel shares were active, as investors continued to trim their positions in the sector on indications that steel demand from China and elsewhere may not prove as robust as initially forecast.


Analysts remain concerned that steep world oil prices may limit worldwide economic growth.


Thomson Financial Corporate Group
http://www.thomsonfinancial.com/

Tags:

Ads

You May Also Like

Brazil’s Lula: It’s Our Fault

Brazilian President Lula told an audience of big investors in the US that his ...

Spain Pitches In for Brazil’s Zero Hunger

The Spanish International Cooperation Agency is in the final phase of evaluating a project ...

Brasileirinho: US Gets a Whiff of Brazilian Choro

"The Sound of Rio," a 90-minute musical documentary film on choro, the first genuinely ...

Havana Threats Against Their Families Made Boxers Give Up Defecting in Brazil

Cuban boxers Guillermo Rigondeaux, 26, and Erislandy Lara, 24,both world champions, changed their mind ...

Want Cheap Ethanol? Go Make It in Brazil

During the panel on energy security, on the first day of the International Conference ...

These Brazilians Make Art Off Fish Scales and Shrimp Nets

These Brazilian artists are just starting but dream that in future they may export ...

The Latina Advantage

Latina women coming to the United States from less than optimal economic backgrounds can, ...

In Brazil Stocks Soar and Minimum Wage Gets 17% Push

Latin American stocks were mostly higher, with Brazilian stocks posting robust gains, as investors ...

RAPIDINHAS

Staring at the massive views and feeling the silent majesty of this place was ...

In Brazil Smoking Is Down But Half of Population Is Overweight

Brazilians are smoking less but continue to lead sedentary lives, a survey by Brazil’s ...