Brazil shrs end higher on late buys, fiscal moves
Reuters, Monday, November 10, 1997 at 16:46
SAO PAULO, Nov 10 (Reuters) - Brazil shares closed up 1.96 percent in a late buying spree in a positive, but cautious reaction to fiscal measures unveiled by the government to boost confidence in the battered real currency, brokers said.
The Bovespa index (INDEX:$BVSP.X) of the 51 most active stocks ended at 9,006 points, up 173 points, in moderate turnover of 544.5 million reais ($495 million).
The bolsa traded sharply higher early in the session, rising over four percent, reflecting optimism about the 51 fiscal measures designed to provide savings of about 20 billion reais, or $18 billion to the government.
But stocks pared gains during the day before bouncing back at the close as investors lost much of the enthusiasm that marked the beginning of the session, while they digested the budget plan.
"Overall the market reacted well, but throughout the day we took a more cautious approach to the budget plan as it is seen taking the economy to a recession," said one trader.
The package of measures, announced early on Monday, includes severe cuts in expenditures and efforts to raise revenues, such as income tax increases.
Though cautious, traders looked relieved the financial markets had a calm day. Stocks closed up and the real rose 0.12 percent in a day without any Central Bank intervention.
Among leading blue-chips, benchmark Telebras (SAO:TEL_.P) preferred rose 2.79 percent to end at 109.99 reais. State oil firm Petrobras (SAO:PET_.P) preferred jumped 4.09 percent, closing at 229 reais after the government said it would raise fuel prices by roughly five percent later this week.
Federal power holding Eletrobras (SAO:ELE_P.B) preferred surged 4.12 percent higher, ending at 505 reais.
Private mining company Cia Vale do Rio Doce (CVRD) (SAO:VAL_.P) preferred closed up 0.43 percent to 20.80 reais.
Copyright 1997, Reuters News Service |
