Brazil’s Bank Workers Union Goes on National Strike

Latin American stocks sank deep into the red, as investors continued to take profits, while fretting over the prospect of further U.S. interest rate hikes. Higher U.S. interest rates worry investors because they make emerging market shares relatively less attractive.

Brazil’s benchmark Bovespa Index plunged 936.12 points, or 3.10%, while Mexico’s benchmark Bolsa Index tumbled 472.75 points, or 3.01%. Argentina’s Merval Index dropped 26.35 points, or 1.60%.

Brazilian stocks extended yesterday’s heavy sell-off, as investors continued to cash in some of the market’s recent stellar gains. The recent run-up has been supported by encouraging economic data signaling tame inflation and economic expansion. Expectations for continued interest-rate cuts have also boosted shares. In September, the central bank lowered rates to 19.5%.

In a further sign the economy is on solid footing, the Brazilian Census Bureau, or IBGE, said Brazil’s industrial production rose 1.1% in August from July, after falling a revised 1.9% in July from June. The IBGE previously had reported a 2.5% fall in July. However, the country’s 12-month rolling industrial production growth declined to 5.1% from 5.9% in July.

Among other indicators, Brazilian motor vehicle production fell 5.6% in September from August to 205,651 units, owing largely to fewer business days in September than in August. However, September’s output was up 1.3% from September 2004.

In corporate news, Brazil’s Justice Ministry Antitrust Division yesterday upheld its ruling on an antitrust case involving miner CVRD and steel maker CSN.

The ruling concerns a dispute between both firms over control of a key railroad and CVRD’s preferential right to purchase iron ore from a mine owned by CSN. The Antitrust Division denied an argument by CVRD that its final decision contained omissions, contradictions and obscurities.

Separately, a brokerage raised its price target on CVRD to US$ 42 from US$ 36. The brokerage also downgraded CVRD to "hold" from "buy."

In other developments, the Brazilian Bank Workers Union began a strike in 20 of the nation’s 27 states. Unions are demanding a wage increase of 11.77%, while the banks have offered a 4% increase plus a one-time bonus for most workers of 1,000 reais (US$ 436).

Elsewhere, Mexican shares tumbled on continued profit taking and weakness in the U.S. market on concerns about higher U.S. inflation and interest rates.

Among individual shares, retailer giant Wal-Mart de Mexico fell ahead of its third-quarter earnings report due out after the market closes on Friday.

Also, shares of Asur were active after the airport operator announced that total passenger traffic for September increased 0.3% from a year ago.

Meanwhile, Argentine issues sank for a third straight session after hitting a fresh record high on Monday. Shares have been pressured recently by profit taking as well as domestic inflation concerns and uncertainty over the outcome of upcoming congressional elections. Yesterday, the national statistics agency, INDEC, said consumer prices rose 1.2% in September. That puts year-on-year inflation at 10.3%, well above the central bank’s target.

Thomson Financial Corporate Group – www.thomsonfinancial.com

Tags:

You May Also Like

Top Lula Adviser Accused by Brazilian Congressman of Taking Bribe

Latin American shares were mixed on the session, as U.S. stocks firmed somewhat. Brazilian ...

Large importers demand identification of transgenics

By backing the detailed identification of transgenic products for export, Brazil is meeting a ...

Fair Trade and Organic Cotton Opened the World to This Brazilian Company

Based in Petrópolis, a city in the Brazilian southeastern state of Rio de Janeiro, ...

Brazil Anticipates Sugar Cane Harvest to Guarantee Supply of Ethanol

Farmers in the Center-South region of Brazil began harvesting their sugarcane crop two months ...

Bye Bye, Brazil

Brazilians have a great custom which is an instant ice breaker. They kiss everybody ...

For UN Rapporteur Brazil Needs Affirmative Action to Deal with Marginalization

Racial discrimination is a structural and historical problem in Brazilian society, according to Doudou ...

Brazil campaign against child prostitution

Epidemic of Lolitas in Brazil. Girls as Young as 10 Led into Prostitution.

Igarapava, in the interior of the Brazilian southeastern state of São Paulo, is the ...

US Counts on Paraguay to Tame Brazil and Argentina

Two soccer teams played for a spot in the semifinal of the Copa Libertadores ...

Brazil’s Pantanal, a Biosphere Reserve, in Danger of Disappearing in 45 years

At an average annual devastation rate of 2.3%, the Pantanal, the world’s largest flood ...

Conto English Version Conversa ao telefone

It is so rare to see Portuguese-language poems translated into English and published in ...