US Inflation Once Again Brings Down Brazilian Stocks

Brazilian stocks retreated, extending recent losses, on continued worries about rising U.S. inflation and interest rates. Argentine shares were further pressured by disappointing local economic data.

Brazil’s Bovespa Index dropped 483.53 points, or 1.26%. Mexico’s benchmark Bolsa Index fell 44.84 points, or 0.22%, while Argentina’s Merval Index lost 29.78 points, or 1.77%.

Brazilian stocks continued to sink still concerned about U.S. inflation and interest rates following data showing a bigger-than-expected rise in U.S. consumer prices in April.

Investors fear that recent signs of inflationary pressure will lead the U.S. Federal Reserve to continue its tightening cycle longer than expected, potentially diverting investment flows away from emerging markets like Brazil.

Closer to home, the Fipe research foundation reported that consumer prices in São Paulo city gained 0.08% in the four weeks ended May 15. That was the same increase seen in the four weeks ended May 7.

On the corporate front, CVRD said it reached an agreement on 2006 iron ore price contracts with South Korean steel maker Posco. Posco agreed to a 19% hike in iron ore fines and a 3.0% decline in iron ore pellet prices. That followed similar agreements with other steelmakers in recent days.

Elsewhere, Mexican shares dipped, as investors continued to fret over the U.S. inflation and interest-rate outlooks. Helping to limit losses, however, a Mexican retailers association, Antad, said sales at its member establishments surged 19.2% in April. Same-store sales rose 9.1% from April 2005.

In other news, engineering and construction firm Empresas ICA won a US$ 105 million contract to upgrade and maintain a highway between Queretaro and Irapuato in central Mexico, the Communications and Transport Ministry said.

Argentine issues dropped amid lackluster local economic data. The national statistics agency (INDEC) said its index of economic activity for March inched up 0.1% from February and rose 7.7% from March 2005. The year-over-year result was well below economists’ forecasts of 8.6%.

Meanwhile, INDEC confirmed that Argentina’s first-quarter unemployment rate was 11.4%, up sharply from 10.1% in the fourth quarter.

Thomson Financial – www.thomsonfinancial.com

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Poor Infrastructure Is Bogging Down Brazilian Agriculture

The government of Brazil has promised farmers 78 billion Brazilian reais, approximately US$ 48 ...

GDP Growth Gives Brazilian Stocks a Boost

Shares in Brazil were up sharply on strong economic data; however, Mexican stocks extended ...

Victorian Times Are Back on the Feet of Brazilian Women

Queen Victoria, who ruled the United Kingdom from 1837 to 1901, was of worldwide ...

Brazil’s GDP Grows to US$ 609 Billion Up to September

The Gross Domestic Product (GDP) of Brazil totaled US$ 609 billion in the period ...

Brazil’s River Old Integration Plan Back on the Drawing Board

Brazil’s São Francisco River Valley integration project developed by the Brazilian Ministry of National ...

China Obscuring Brazil’s Lula Charm

As the economic importance of the countries situated around the Pacific Rim has grown, ...

Brazil: While Lula’s Revolution Fizzles, Chavez’s Star Rises.

Criticized by some for being little more than a debating society and a “one ...

Brazil: Turn Down That Noise!

Campaigning in São Paulo continues on the streets a few days before the first ...

Uncertainty (35%), Falling Sales (28%) Main Complaints of Brazil’s Small Industry

Brazil's Union of Micro and Small Industries of the State of São Paulo (Simpi) ...

Brazil’s Development Bank Funds Petrobras’s Platforms

Brazil’s National Bank of Economic and Social Development (BNDES) is going to finance the ...