Brazil shares dip on profit-taking, scandal talk
Reuters, 06/08/2001 17:10
By Nicholas Winning
SAO PAULO, June 8 (Reuters) - Brazilian shares lost ground on Friday as a players took profits from a recent Argentina-inspired rally in the latter half of the session amid fears of fresh political uncertainty next week, traders said.
The Sao Paulo Stock Exchange's benchmark Bovespa (INDEX:$BVSP.X) index slipped 0.63 percent to end at 15,366.2 points. Heavyweight stocks were among the 29 decliners that outweighed the 22 gainers, leaving the index 0.7 percent above where it began the year.
State oil giant Petrobras (SAO:PETR4) (NYSE:PBR), the market's second most heavily-weighted stock, dipped 1.4 percent to 57.70 reais, while cable TV and Internet provider Globo Cabo (SAO:PLIM4) (NASDAQ:GLCBY), the index's No. 3 stock, dropped 6.2 percent to 0.91 real.
Brazil's biggest fixed-line phone operator Telemar (SAO:TNLP4) (NYSE:TNE), the market's heaviest-weighted stock, rose 0.2 percent to 38.75 reais.
A local trader said Telemar had been kept under the 39 reais mark by a large bank ahead of the June index futures expiration on Wednesday. The sessions before futures expiry are usually very choppy.
Dealers said worries about fresh corruption allegations leveled at Senate head Jader Barbalho in weekend magazine Istoe had brought fresh political jitters to trading desks.
Barbalho has been fingered in countless graft scandals, but none of the allegations have ever stuck amid repeated denials of any wrongdoing from him.
"The market is very cheap with the weakness of the real and it still can't find the strength to rise, and that's because the political uncertainties ahead," said Bonval brokerage director Celso Senise.
The Brazilian real has lost more than 20 percent of its value against the dollar so far this year amid ongoing concerns about Argentina's economic woes, local political scandals and the government's emergency energy rationing plan which began on June 1.
Unlike equities, the real took little support from Argentina's larger-than-expected $29.48 billion debt swap this week that set the Bovespa on a modest 3.9 percent rally over the last five trading days.
Traders also said the market was still susceptible to worries about the impact of the government's emergency electricity plan that aims to cut consumption to avoid blackouts amid insufficient power supply.
Electric utilities, which have recovered this week from heavy selling on the back of the rationing, were mixed. State electricity holding Eletrobras (SAO:ELET6), the most traded stock in the sector, ended 2 percent lower at 30.49 reais. saopaulo.newsroom@reuters.com))
Copyright 2001, Reuters News Service |
