Brazilian stocks sank into the red today, as investors reacted to a continued drop in U.S. Treasuries prices that pushed the yield on the 10-year note above 5%. Brazil’s Bovespa Index fell 345.28 points, or 0.90%.
Meanwhile, markets in Mexico and Argentina were closed. All Latin American markets, including Brazil, will be closed this Friday, April 14, in observance of Good Friday.
Weighing on Brazilian equities, long-term U.S. Treasuries prices extended recent losses, pushing the yield on the 10-year note above 5% for the first time since June 2002.
Prices were driven lower by heightened expectations for continued interest-rate hikes by the Federal Reserve after data released today showed a bigger rise in U.S. retail sales in March. Higher U.S. rates could, in turn, divert funds away from emerging markets like Brazil.
In corporate news, airline TAM was in focus after the air carrier raised 1.559 billion reais Wednesday, April 12, from its global offering of shares on the Brazilian Stock Exchange. The money raised exceeded the 1.495 billion Reais initially announced, due to strong demand.
Meanwhile, paper and pulp producer Votorantim posted a first-quarter net profit of 159 million reais, up 10% from 145 million reais a year earlier. However, net operating revenue fell 2%.
In the same sector, a major investment bank raised its price target for paper and pulp producer Aracruz to US$ 52 from US$ 43, citing "a stronger than expected scenario given better than expected momentum in pricing."
Elsewhere, online retailer Submarino SA said it raised 812.8 million reais from an offering of shares on São Paulo’s Bovespa Stock Exchange.
Technology group Totvs SA said it purchased local rival RM Sistemas SA for 206 million reais. The acquisition came a month after Totvs raised 460 million reais from its initial public offering of shares on the Bovespa.
Supermarket chain Companhia Brasileira de Distribuição (CBD) said its nominal same-store sales dropped 11.5% in March from a year earlier.
Thomson Financial – www.thomsonfinancial.com