U.S. High Interests Rates Weigh on Brazil Stocks

Latin America continued to suffer from ongoing global inflation fears and concerns that U.S. interest rates will continue to rise for some time. Brazilian investors also had an outbreak of foot-and-mouth disease to contend with in the state of Mato Grosso do Sul, a key cattle-raising state in the country.

Brazil’s Bovespa Index tanked 734.19, or 2.40%. Mexico’s benchmark Bolsa Index fell 178.43 points, or 1.18%, while Argentina’s Merval Index declined 18.47 points, or 1.15%.

Brazilian shares sank, amid enduring inflation worries, including at home. The consumer price index in Sao Paulo rose 0.59% in the four weeks ended October 7, versus 0.44% in the prior reading, at the high end of forecasts ranging from 0.50% to 0.61%.

In corporate reports, mining firm CVRD said that it is not considering raising its bid for Canada’s Canico Resource, following the nickel miner’s recommendation to shareholders to reject CVRD’s offer. Canico’s board of directors believes the Cdn$ 17.50 (US$ 14.79) per share offer undervalues the firm.

On the credit front, Fitch revised its rating outlook on several Brazilian banks to "positive" from "stable," following a similar move recently made on Brazil’s sovereign rating.

Mexican shares followed a similarly negative pattern to Brazil. The country’s National Association of Supermarkets and Department Stores said that sales surged 9.5% in September from the corresponding period a year ago.

Same-store sales advanced 1.3% last month. Elsewhere, TV broadcaster Grupo Televisa is reportedly in talks with Spain’s Globomedia to collaborate in an upcoming auction for license to launch a commercial TV channel in Spain.

In upbeat research, a major investment bank noted that America Movil seems to have signed on a large number of new subscribers in Colombia in the third quarter, suggesting the firm will continue to outperform rival Telefonica Moviles from Spain.

Separately, the same bank restarted conglomerate Alfa at "overweight," due in part to solid assets and attractive valuation, among other factors.

Elsewhere, Argentine shares eased back, in tune with regional and other emerging markets, caught in ongoing worries about higher U.S. inflation and interest rates. Of note, in local data, consumer confidence rose 0.4% in September, and 1.4% from a year ago, versus a 4.1% decline in September.

Thomson Financial Corporate Group –
www.thomsonfinancial.com

Tags:

Ads

You May Also Like

Interest Rate Hikes Not Reining In Brazil’s Inflation

Brazilian inflation remains strong in spite of the extremely tight monetary policy with the ...

Lula: Despite Higher Primary Surplus Brazil Remains on Track

The government has decided to raise its primary account surplus target from 4.25% of ...

Brazil Grows 6% in First Half and Expects 5.5% Growth in 2008

According to the latest release from the IBGE (Brazilian Institute of Geography and Statistics). ...

Brazil Isn’t Ready to Replace the US as Protector of Latin America

Many modern intellectuals (leftist economists and political scientists of various nationalities) have been advocating ...

Brazil Puts Biodiesel in the Tank

While developed nations around the world are working on diversifying 10 to 20 percent ...

President Lula’s Choices

Pressing problems faces his Excellency President Lula—who will run the central bank By John ...

Brazil Injects Close to US$ 3 Billion in Economy to Halt Rising Dollar

The Brazilian Central Bank announced on Thursday, October 16, further measures to ensure liquidity ...

Brazil Boosts Interest Rates for 9th Time in a Row

The Monetary Policy Committee (Copom) of the Brazilian Central Bank (BC) decided yesterday to ...

Brazil Wants to Become a Power in Software

Brazil’s Minister of Development, Industry, and Foreign Trade, Luiz Fernando Furlan, affirmed March 9 ...

Addicted to New York This Famous Hair Stylist Keeps Heart in Brazil

For 30 years, hair stylist Hélio de Souza has worked and lived in the ...