Brazilian and Latin American shares rose, ahead of this week’s U.S. presidential election. Stocks gained strength from positive corporate news and reaction to Argentina’s offer for the restructuring of its defaulted debt. Both the Mexican and Argentine markets hit record closing highs.
Brazil’s benchmark Bovespa Index advanced 220.80 points, or 0.96%. Brazilian shares firmed on a pullback in world oil prices, one session ahead of the All Souls’ holiday.
Local markets will be closed Tuesday. Investors brushed off news that the ruling Workers’ Party suffered some losses in municipal mayoral elections.
In an expected win, José Serra of the opposition Social Democratic Party overtook Marta Suplicy of the Workers’ Party in the country’s financial capital of São Paulo.
Following the local elections, certain analysts anticipate that state-run oil company Petrobras will boost domestic gasoline prices, which trail behind sky-high global crude oil prices.
However, doubt has been cast on that position, after the central bank’s interest-rate setting committee criticized Petrobras, indicating it may intervene to put an end to uncertainty regarding local fuel pricing.
Other analysts believe the firm’s management may now seek to assert its independence by postponing the price increases.
In other news, water and sewage utility Sabesp was active. On Friday, the firm announced that it will sell 598.2 million reais in shares via a secondary offering that began Friday.
Sabesp will sell 1.43 billion common shares on the Bovespa exchange and 3.84 billion shares in the U.S. as ADRs, each of which will represent 250 common shares.
On the U.S. economic front, personal income rose 0.2% in September after rising a downwardly revised 0.3% in August.
Personal consumption rose 0.6%, after dropping by an upwardly revised 0.1% in August.
Economists had forecast personal income would rise 0.3% and spending would rise 0.6% in September.
Also, the ISM index fell to 56.8 in October from 58.5 in September. Economists expected the index to rise to 58.9.
Also, construction spending was unchanged in September after rising an upwardly revised 0.9% in August. Wall Street had been expecting September construction spending would rise 0.5%.
Thomson Financial Corporate Group