Brazil Market Goes Up While Expecting Interest Rate Cut

Latin America moved higher across the board, giving some relief to investors following recent bouts of negative activity. Investors in both the U.S. and Brazil mostly ignored strength in crude oil prices, as tropical storm Wilma could make its way to the Gulf.

U.S. shares were bolstered by Dow member General Motors, which reached an agreement with the United Auto Workers union to cut health costs. Also, a U.S. Supreme Court decision that rejected a key appeal in favor of the tobacco industry bolstered Altria Group.

Brazil’s Bovespa Index surged 471.39 points, or 1.58%. Mexico’s benchmark Bolsa Index rallied 389.85 points, or 2.62%, while Argentina’s Merval Index advanced 9.97 points, or 0.62%.

Brazilian receipts were upbeat ahead of the central bank’s monetary policy meeting this week, in which investors expect up to a half a point cut in rates. Meanwhile, in a weekly central bank survey, analysts lifted their forecast for the country’s 2005 trade surplus to US$ 41.72 billion from US$ 41.54 billion the prior week.

On the corporate front, state-run energy firm Petrobras signed contracts with USC to supply the firm 1.8 million cubic meters of natural gas a day for 20 years. USC is a joint-venture steel mill what is set to be built in northeastern Brazil. In mining, CVRD’s foreign currency bonds were upgraded by Moody’s Investors Service to positive from stable.

Turning to earnings releases, paper and pulp firm VCP said that its third-quarter net profit declined 44% to 114 million reais from 205 million reais a year earlier, partly due to the appreciation of the real against the greenback. EBITDA declined 21% to 244 million reais from 309 million reais last year, while revenues edged down to 692 million reais from 711 million reais.

No-frills airline Gol announced that it received its 39th Boeing 737 aircraft. The firm also preserved its 2005 target for a total fleet of 42 jets. Elsewhere in the industry, according to financial newspaper Valor Econômico, TAM intends on a new share offering and a listing on the New York Stock Exchange in 2006.

In Mexico, stocks rallied, as investors bought up recently beaten down shares. Regional strength, as well as a positive session for Mexico’s key trading partner, the U.S., also aided investor sentiment.

Broadcaster Grupo Televisa gained ground on word the firm is part of a consortium bidding for a license to operate a television station in Spain. Televisa is set to own 40% of the consortium.

Southern Peru Copper changed its name to Southern Copper Corp. in order to reflect the firm’s "international nature," according to a company spokesperson. Grupo Mexico is the firm’s parent company.

Argentina followed regional shares into the black, despite some local turmoil. Also, options contracts expire on Thursday, and congressional elections are set for Sunday.

Meanwhile, approximately 28,000 oil and natural gas workers went on strike to demand higher wages. Repsol YPF and Petrobras are among the firms in negotiations with the workers.

Thomson Financial Corporate Group – www.thomsonfinancial.com

Tags:

You May Also Like

Over 100 People Died Last Year in Brazil’s Countryside Due do Conflicts

At least 38 people were murdered in Brazil in 2005 as a result of ...

Fashion Week in Brazil Brings 21 Foreign Buyers Generating Over US$ 250,000

The São Paulo Fashion Week, one of the main events of its kind in ...

In Brazil, Violence Against Elderly Is Overlooked

Brazil’s federal government is getting ready to launch the National Plan to Confront Violence ...

Brazil’s Highways Are a Disaster, Admits Government

The investments made on Brazil’s highways over the past 12 years were mere maintenance, ...

More Blacks and Less Whites in Brazil

The distribution of the Brazilian population by color or race presented a slight alteration ...

Gray land – COVER STORY

At the start of the century, Brazilians’ life expectancy was a mere 33.7 years. ...

Brazil Goes Beyond Self Sufficient to 2.3 Million Oil Barrels a Day

Brazil’s government owned Petrobras averaged during October oil and gas production of 2.343.451 barrels ...

Brazil’s Petrobras Is Still Calling for US$ 112 Billion in Investments

Brazilian state-controlled oil multinational Petrobras's business plan for the 2009/2013 period, which is currently ...

Petrobras Gets US$ 18 Bi to Explore Offshore Oil in Southeast Brazil

Petrobras’s Master Plan for the Development of Natural Gas and Petroleum Production in the ...

Brazilians Say It Has Become Harder to Get a Job

Consumer confidence in Brazil’s situation rose 1.5% in October, in comparison with September, according ...