Spirit of Season Dampens Brazil’s Market

Brazilian shares headed south, as profit taking commenced ahead of the year-end holidays. Trading could be light later in the week, with Christmas falling this Saturday. Brazil’s benchmark Bovespa Index fell 122.51 points, or 0.48%. Brazilian shares declined, amid profit taking and expiry of monthly options contracts.

Traders said prices were impacted as investors jockeyed around strike prices of options contracts for key blue chips. Traders expect Brazil’s market to likely become more bullish now that the options expiry is over.


This week’s Central Bank survey showed economists and analysts reduced their forecasts regarding 2005 inflation to an average of 5.76% from 5.78% a week earlier.


While the revision was not major, the direction was downward, bolstering market opinion that Brazil’s Central Bank may refrain from future increases in the base interest rate. Last Wednesday, the monetary authority hiked its benchmark Selic interest rate by 50 basis points to 17.75%.


Also, the University of Sao Paulo’s Fipe inflation index slipped to 0.55% in Brazil’s largest city for the four weeks ended December 15 from 0.57% in the four weeks ended December 7.


The latest consumer inflation reading was in line with estimates from 0.55% to 0.62%. Fipe’s figures demonstrated that inflationary pressure is easing amid the Central Bank’s ongoing efforts to control inflation.


Separately, Brazil posted a current account deficit of US$ 242 million in November, its first monthly deficit since April. Still, based on robust exports and continued foreign direct investment, last month’s result kept Brazil on track for its second straight annual current account surplus in 2004.


Turning to corporate items, long steel maker Gerdau SA reported that it will invest 1.4 billion reais by 2007 to boost its steel output in Rio de Janeiro state and build a new plant to produce specialized steel products for automakers. Gerdau shares fell on the session.


Thomson Financial Corporate Group
http://www.thomsonfinancial.com/


PRNewswire

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Your email address will not be published.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

Brazil’s Presidential Hopeful Rousseff Goes Back on Platform’s Radical Proposals

Brazil’s opposition presidential candidate José Serra strongly questioned the “radical” positions of also presidential ...

Five Million Brazilians Are Learning Spanish, Soon They’ll Be 41 Million

Brazilians, over five million of them, are learning Spanish, according to the latest edition ...

Brazil’s Sadia Wants to Take Over Perdigí£o. Offer Too Low, Says Perdigí£o

Brazilian food company Sadia has decided to purchase stock control of Perdigão, their main ...

Brazil Wants US Help Against Money-Laundering

One of the purposes of a meeting held February 16, in BrasÀ­lia, by Federal ...

World’s Need for Brazil’s Ethanol May Unblock WTO Trade Barrier Talks

The World Economic Forum, which started yesterday, January 24, in Davos, Switzerland, will include ...

Brazil’s Pantanal Wetlands Doomed to Disappear in a Few Decades

The growth of farming and cattle ranching in western Brazil could destroy the world’s ...

Best-seller Books, Plays and Movies

To understand Brazil’s rural unionism, we need to distinguish among the movement’s four different ...

Opposition Claims Peru-Brazil Transcontinental Highway Is Too Expensive

Peruvian President Alejandro Toledo signed contracts Thursday, August 4, in Lima for the construction ...

Brazilian Populism: Good for Politicians, Bad for the Poor

Populism reflects the rhetorical style of political leaders who claim to govern directly for ...

Brazil Industry Breaks Four-Month Surge, Dropping 2.5%

Industrial production in Brazil fell 2.5% in July, in comparison with June. According to ...