Bad News from US Means Good News for Brazilian Stocks

Latin American shares moved higher today as Mexico’s central bank left interest rates unchanged, Brazilian shares recouped early losses and Argentina followed the positive sentiment higher as worries about U.S. interest rates and inflation took a back seat to local developments.

Brazil’s Bovespa Index leapt 344.45 points, or 1.00%. Mexico’s benchmark Bolsa surged 357.33 points, or 1.96%, while Argentina’s Merval Index gained 11.4 points, or 0.72%.

Brazilian stocks wiped out early losses to register gains after falling 1% at the start of trade in São Paulo. Investors eyed economic data from the U.S., which showed orders for new U.S.-made durable goods fell a more-than-expected 0.3% in May. It marked the second decline in a row, with orders now down 3.5% since a peak in December.

Shares in Brazil’s largest bank, state-controlled Banco do Brasil, were down 3.6% in the run-up to a large secondary share offering next week.

Banco do Brasil is in the midst of an operation to sell a total of 45.4 million common shares via a secondary offering, and will set a price Monday.

Mexico’s stocks moved higher as the Bank of Mexico left interest rates unchanged at its policy meeting, encouraging investors worried about monetary tightening trends throughout the worlds leading economies. The bank of Mexico left the overnight rate at a minimum 7% and reiterated that its recent easing cycle is over for now.

The decision was widely expected, coming nine days before presidential elections and amid growing concern about rising global interest rates. The U.S. Federal Reserve is expected to raise rates next week, and the U.S. market is pricing in another rate hike in August.

Mexico holds general elections July 2 to elect a new president and Congress. Separate election polls published Friday by Mexico’s Reforma and El Universal newspapers gave leftist presidential candidate Andrés Manuel Lopez Obrador a narrow lead over his conservative rival Felipe Calderon.

Argentine issues tracked Mexico and Brazil higher on today’s session. A rally in the shares of market heavyweight Tenaris bolstered the key Merval Index.

Thomson Financial – www.thomsonfinancial.com

Tags:

You May Also Like

Brazil Wants to Create 15 New Conservation Units in the Amazon

At present the state of Amazonas, in Brazil, has 14 million hectares of protected ...

Far Too Many in Brazil Remain in Poverty

It is a great pleasure for me to be here on this special occasion ...

Brazil President Urges US and EU to Put More Effort to Control Debt Crisis

The presidents of Brazil, India, and South Africa on Tuesday urged the world’s rich ...

Brazil Fights Crisis with US$ 3.6 Bi in Tax Cuts

In order to prop the slowing Brazilian economy and meet a 4% growth target ...

Despite Loss in Venezuela, Brazil’s Petrobras Has Record Profit

Brazilian state-controlled oil company Petrobras ended 2006 with a net profit of 25.9 billion ...

Brazil and UN Peace Mission to Remain in Haiti Past the Election

The head of the UN  peace mission in Haiti (Minustah), the Chilean diplomat, Juan ...

Contrary to Experts Brazil’s Finance Minister Forecasts a Minimum 4% GDP Growth

Guido Mantega, Brazil’s  Finance Minister is still maintaining his estimate of growth of between ...

Beauty and the Beat

Bahia has a new muse. Banda Eva sells one million CDs and projects Ivete ...

Rugby in Brazil? Don’t Laugh!

Compared to football, rugby is almost non-existent in Brazil. But it isn’t entirely absent. ...

Profit-Taking Time in Brazil and LatAm

Brazilian and Latin American markets reversed their recent positive course and succumbed to selling ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`