Worries About Halt on Rate Cuts Lower Brazilian Shares

Brazilian shares moved lower Tuesday, June 20, amid uncertainty over domestic and overseas monetary policy. Argentine shares also went down, while Mexico bounced back from sharp declines Monday.

Brazil’s Bovespa Index receded 265.21 points, or 0.78%. Mexico’s benchmark Bolsa jumped 199.40 points, or 1.13%, and Argentina’s Merval Index tumbled 28.25 points, or 1.79%.

Brazilian investors are increasingly wary about monetary policy, with some saying the Brazilian Central Bank may call a halt to its recent monetary loosening policy.

A pause in rate cuts could come as a response to recent emerging-market volatility, they said. Brazil’s Selic base interest rate is currently 15.25%, despite eight consecutive rate cuts.

In economic news, the Fipe research foundation said that the consumer price index for São Paulo fell 0.50% in the four weeks ended June 15, compared with a 0.38% decline in the four weeks ended June 7. The most recent fall was sharper than expected by analysts.

In corporate reports, CVRD rose, after Chinese steelmakers agreed to a 19% iron-ore price increase with BHP. A similar deal is expected to be announced by CVRD later this week.

Elsewhere, Mexican stocks recovered today, rising sharply in midday trading, after starting the week under heavy selling pressure. Mexican stocks had been under pressure, along with other emerging-market assets, amid fears of rising global interest rates. Meanwhile, investors are also looking forward to the Bank of Mexico’s monthly policy meeting this Friday, in which the overnight lending rate is expected to remain unchanged.

On the corporate front, Cemex climbed, after a major investment bank initiated coverage of the cement giant at "overweight," saying the company’s long-term growth potential isn’t reflected in the price and that the recent selloff presents a good buying opportunity.

Argentine shares slid as the local market played catch-up after being closed for a national holiday Monday. There were few financial news items available to steer trading today. Trading volume remained low.

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Your email address will not be published.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

Federal Prosecutor Indicts 40 Brazilian Notables Involved in Bribe-for-Vote Scandal

Brazil’s Federal Prosecution Office (Ministério Público) announced Tuesday, April 11, the indictments of 40 ...

RAPIDINHAS

Indictment, Brazilians have learned, does not mean conviction, and as similar cases pile up, ...

Brazilians Want a Piece of World’s Tallest Building Project

Brazilian companies participating in a mission of Santa Catarina state construction industry enterprises to ...

Brazilian Imports from Arabs Grow 33%. Exports Up 22%.

The Arab countries had 32.6% greater revenues from exports to Brazil in the first ...

Brazil participated at Dubai's Gulfood fair

Brazil to Keep Title as Emirates’ Top Beef Supplier

The eleven Brazilian producers of cattle beef that  participated in the Gulfood, the largest ...

With the FTAA Everyone Wins, Says Bush in Brazil

In his final address in Brazil, in the Brazilian capital BrasÀ­lia, the President of ...

Brazil’s Latest Landless: The Indians

Federal Police officers helped by three army helicopters removed some 700 Indians from a ...

After 13-Year Debate, Brazil Decides All High Schools Will Teach Spanish

Brazilian President Luiz Inácio Lula da Silva signed into law Friday a bill making ...

Brazil’s Petrobras Needs to Respect Bolivia’s Property Rights

A Brazilian physicist, José Walter Bautista Vidal, who played an important role in the ...

Jamaica Defends a Permanent Seat for Brazil at the UN

Jamaica’s Prime Minister, Percival J. Patterson, demonstrated support for Brazil’s candidature for a permanent ...