Brazil’s Bovespa Has Worst Fall Since 9/11 and Dollar Goes Up Sharply

São Paulo, Brazil, stock market, Bovespa São Paulo's Stock Exchange (Bovespa) had today its worst session since September 11, 2001, the day terrorists attacked New York's World Trade Center. Ibovespa, the main index, plummeted 7.87% and ended up closing 6.63% down at 43.145 points.

On 9/11 the index had fallen 9.17%. On the other hand, the American dollar had its biggest hike since May of last year, rising 1.73 and closing at 2.12 reais.

The result represent a fall even worse than the one that occurred in July 2002, when the finance market reacted badly to the news that Luiz Inácio Lula da Silva, a candidate from the leftist Workers Party might be elected president of Brazil. That month Bovespa had in one day a 6.52% fall.

It was also impressive the volume of shares that changed hands: 5.44 billion reais (US$ 2.57 billion). Most of the sellers were apparently foreigners taking their money to markets they consider more secure, like the US interest markets.

Bovespa's performance was impacted by the Chinese stock market, in Shanghai, which closed close to 9% down, the biggest fall in ten years. There are several reasons for the Chinese market decline including rumors that the Chinese government will intervene in the finance market.

Some analysts, however, believe that the world commotion in the markets has to do simply with an adjustment in portfolios, when investors after having earned big profits decide to sell their shares.
 
Bovespa's tumble was also in response to comments made Monday, February 26, by former US Central Bank chief Alan Greenspan, who stated that the world's largest economy might get into a recession by the end of the year. News that US Vice President Dick Cheney was the target of a suicide attack in Afghanistan raised geopolitical tensions.

Data released this morning showing strong reduction in consumption by Americans in January, didn't help things either. The Dow Jones ended up falling 3.17% or more than 400 points.

Tags:

Ads

You May Also Like

Brazil Wants to Use Sports for Social Improvement

Within 45 days Brazil’s National Sports Policy will be defined and officially approved, according ...

Brazil Fines Forest Burner US$ 410,000

Brazil’s Ibama (Environmental Protection Institute) has slapped a US$ 410,000 (1,331,000 reais) fine on ...

Lula’s Ex-Chief of Staff, Vows He Won’t Resign from Brazilian Congress

Brazilian Federal deputy José Dirceu (PT-São Paulo state) presented the Ethics Council of the ...

Lula Urges Portugal to Ease Process of Legalizing 30,000 Illegal Brazilians

President Luiz Inácio Lula da Silva’s first stop on his European trip this week ...

US Eyes

All indicates that Sivam will be nothing but a branch of the broadest aerial ...

Lack of Capital for Rural Producers Cuts Jobs in Brazil

The Brazilian Confederation of Agriculture (CNA) called attention last week to the decline in ...

Brazil’s World Social Forum Guarantees Right of Expression, Says Mayor

The mayor of Porto Alegre, José Fogaça (PPS), affirmed yesterday, January 24, that the ...

A Word from Brazil to the EU: Don’t Dump Your Old Tires on Us

Brazil’s Minister of Environment, Marina Silva, is participating in the opening of an arbitration ...

Despite Big Drop from December Brazil Auto Industry Has Best January Ever

In Brazil, production and sales, domestic and foreign, of vehicles had their best January ...

TV Killed the Movies in Brazil

Cinema revenues have been vastly reduced over the last half-century as Brazil’s cinemas have ...