Mass Killings by Drug Gang Don’t Worry Brazilian Investors

Latin American stocks tumbled as investors continued to take profits amid worries about rising global inflation and U.S. interest rates. Brazilian shares were further pressured by some lackluster earnings news from local corporate giants.

Brazil’s Bovespa Index dropped 940.52 points, or 2.34%. Mexico’s benchmark Bolsa Index fell 432.77 points, or 2.05%, while Argentina’s Merval Index lost 54.93 points, or 3.04%.

Brazilian stocks sank, as investors digested a mixed batch of local earnings reports and continued to fret over the outlook for U.S. interest rates.

Attacks by a drug gang that left 91 dead, half of them policemen, didn’t seem to have contributed to the market downturn. Fear of new attacks, however, shortened the period the Bovespa, the São Paulo stock market, kept open, this Monday, May 15.

On the earnings front, aircraft maker Embraer said late Friday, May 12, that its first-quarter net profit plunged to 86.9 million reais from 233.8 million reais a year earlier, missing expectations. Results were hurt by an appreciation of the real and a drop in deliveries.

Meanwhile, oil giant Petrobras late Friday said its first-quarter net profit rose 33% from a year ago to 6.68 billion reais but missed analyst estimates. Results were hurt in part by higher taxes.

Banco do Brasil SA posted a record first quarter net profit of 2.343 billion reais, up sharply from 965 million reais a year ago and above market forecasts. Results benefited from growth in the bank’s client base.

Elsewhere, Mexican shares dropped for a fourth straight session on continued profit taking amid worries that U.S. interest rates will rise higher than initially expected.

Before the recent bout of profit taking Mexico’s bolsa had risen strongly on optimism about local economic and earnings growth. In a sign the economy remains on solid footing, the Finance Ministry reported today that Mexico’s industrial production surged 9.7% in March from a year earlier.

Argentine issues followed the region’s descent into the red amid profit taking and concerns about rising U.S. interest rates and global inflation.

On an up note, a major investment bank upgraded Argentina to "outperform" from "marketperform." "We have been surprised at the staying power of Argentina’s recovery, and believe that the economy still has significant impetus, as long as commodity prices remain high," the bank said.

Thomson Financial – www.thomsonfinancial.com

Tags:

You May Also Like

Brazil’s Petrobras to Build 26 Oil Tankers and Create 32,000 Jobs

The arm of Brazilian oil giant Petrobras in the transportation sector, Transpetro, will sign ...

Turn In Your Weapons in the Name of God!

People going to Brazilian churches these days have the opportunity not only to free ...

20 Years Late, Brazil Still Can’t Follow the Constitution and Give Indians Their Land

In order to reconcile the interests of Brazilian Indians with those of farmers in ...

Brazilian Police Bar Press from Doing Its Work

London-based international freedom-of-expression organization Article 19 has issued a note condemning the abuses committed ...

Up-and-coming Brazilian Singer Lili Rocha Is a Rocking Raising Star

Lili Rocha’s singing career began in the streets and squares of her small native ...

Brazilian Economist Describes “Global Disorder” Created by Economic Crisis

Talking during a magisterial conference before the United Nations Economic Commission for Latin America ...

Brazilian Bug Helps New Zealand Fight Killer Weed

A quiet bush clad reserve in the heart of the Manawatu, a New Zealand ...

Brazil: Lula’s Popularity Is Down

What happened to Brazilian President Lula campaign promise to double the purchasing power of ...

Brazil Is Counting on US$ 20 Billion in Private Capital to Modernize Ports

The Brazilian government hopes the projects it is developing for improvement of Brazil’s main ...

LETTERS

By Are We? Re: "We Are Paying for This War" — www.brazzil.com/p102apr03.htm, Comrade Stédile ...