Brazil Rebounds on Low Inflation News

Brazilian shares turned around, following losses posted across the board yesterday. Investors are still anticipating Thursday’s, June 29, release of the U.S. Federal Reserve’s decision on interest rates. The Fed is widely expected to raise rates by 25 basis points.

Brazil’s Bovespa Index jumped 458.92 points, or 1.34%. Mexico’s benchmark Bolsa rose 80.36 points, or 0.45%, while Argentina’s Merval Index rallied 33.53 points, or 2.10%.

Brazilian issues bounced back today, as investors cheered a benign inflation report released by the Central Bank. For its second-quarter inflation report, the bank raised its estimate for the IPCA inflation index to 3.8% for 2006 from 3.7%. For 2007, the index was lifted to 4.2% from 3.9%.

State-controlled Banco do Brasil rallied on its first day of trading on the Novo Mercado Mechanism on the Bovespa. Brazil’s largest bank completed the sale of 45.44 million common shares today, which raised 1.97 billion reais before migrating its shares to the Novo Mercado Mechanism.

Turning to brokerage notes, a large investment house raised its earnings estimates for Petrobras and its Argentine unit Petrobras Energia, as the bank expects oil prices will continue to rise.

Wireless provider Vivo was removed from a major investment bank’s focus list, partly due to disappointing earnings and guidance, and replaced with rival Tim Participações.

In deal news, Colombia’s Interconnexion Electrica, or ISA, bought a controlling share in Brazil’s electric power transmission firm Cteep for 1.19 billion reais at an auction on the Bovespa.

Mexican shares witnessed more muted gains on the day, as investors await Sunday’s tight presidential election. Trading volume was low and is expected to remain so until after the elections.

Argentina bounced back from yesterday’s declines alongside broader regional gains. There were few economic or corporate reports to direct trading activity.

Thomson Financial – www.thomsonfinancial.com

Tags:

You May Also Like

Brazil Has a Plan to Cut Deforestation by 70% in a Decade

The Brazilian government has just announced a plan to cut destruction of its Amazon ...

Laughing Stock

"Now we find out that all the recent American elections, done with the same ...

Brazil Wants the US Out of the Internet’s Control Room

The second phase of the World Summit of the Information Society which began Wednesday, ...

Brazil Selling Products Overseas For Quality and Not Low Price Alone

The participation of Arab countries as destinations for Brazilian machinery and equipment exports is ...

‘Pig-Headed’ Brazil’s Lula Talks to Bush, Says World Will Still Get Trade Accord

The President of Brazil, Luiz Inácio Lula da Silva says that he believes the ...

Brazil’s Azzar, Haidresser to Princesses

The Lebanese coiffeur Georges Azzar, who has worked for three years at one of ...

Brazil and South America Aren’t Washington’s Open Backyard Anymore

When Evo Morales won his stunning December 18 presidential election victory, he did more ...

Brazil to Produce 35% of World’s Food in a Decade

Brazil plans to increase its farm output by 40% in the next 10 years, ...

RAPIDINHAS

Considered by some one of the best Brazilian painters, Cândido Portinari has also been ...

Brazil Has Already Reported 3,000 Dengue Cases This Year

Brazil’s Ministry of Health reports that as the dengue mosquito season begins – it ...