Brazilian shares ebbed, despite signs of easing inflationary fears and strengthening in the U.S. dollar. Brazilian issues pulled back on profit taking after closing last week at an all-time high. Brazil’s benchmark Bovespa Index slid 143.06 points, or 0.57%.
In economic headlines, a senior official at the World Bank said that he sees Latin America’s regional economy growing more than 5% this year, above the bank’s latest official estimate of a 4.7% expansion.
Guillermo Perry, chief economist for Latin America at the World Bank, stated that robust global demand for raw materials from Latin American and a recovery in regional business investment are spurring growth after three years of economic stagnation.
Perry also said Latin America’s regional economy should expand 4% to 4.5% in 2005.
Brazilian shares declined, after the local market reached an all-time closing high on Friday, as profit-taking outweighed projections for a decline in inflation.
Investors largely shrugged off a weekly central bank survey indicating that 100 economists and analysts polled expect Brazil’s IPCA consumer price index, which the bank watches when setting monetary policy, to rise 5.8% in 2005, down from a 5.9% increase forecast last week.
The lower inflation outlook could reduce concerns that the central bank will continue for many months, or even accelerate, rate hikes in its base interest rate. Still, Brazil’s macroeconomic outlook remains favorable.
Also, Brazil’s wholesale-heavy IGP-M inflation index gained 0.82% in November, following a 0.39% rise in October. The November results were in line with forecasts. Tomorrow, Brazil’s government will report third-quarter gross domestic product growth.
Turning to the corporate front, Telemar Norte Leste Participações rose. Friday evening, the firm announced plans to spin off and list separately its Contax call center.
Thomson Financial Corporate Group
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