Brazil shares rebound ahead of Argentina measures
Reuters, 07/11/2001 18:26
SAO PAULO, July 11 (Reuters) - Brazilian shares bounced back late in the session on Wednesday on cautious optimism ahead of an economic announcement in crisis-hit Argentina and gains in heavyweight Globo Cabo (SAO:PLIM4), traders said.
The Sao Paulo Stock Exchange's benchmark Bovespa (INDEX:$BVSP.X) index rose 1.78 percent to 13,811.8 points. Gainers outpaced decliners by 36 to 20 to leave the market 9.5 percent below where it began the year.
The market had slumped in negative territory for most of the day as concerns that neighbor and key trading partner Argentina was facing fiscal insolvency or even a debt default caused a wave of selling across the world's emerging markets.
But the news that Economy Minister Domingo Cavallo was preparing to announce new economic measures later on Wednesday after vowing to eliminate the budget gap by cutting spending and clamping down on tax evasion lifted the market's spirits.
"The market is looking forward to the fiscal package in Argentina," said ABN AMRO's Marcos Zaid. "Prices have also fallen a lot in recent days."
The market was also boosted by a 13.4 percent rise in the share price of cable TV and Internet provider Globo Cabo (NASDAQ:GLCBY) to 1.10 reais.
The stock, which is the third heaviest-weighted on the index, rose on persistent talk that it was selling its cable network.
"It's the same story about the sale of assets ... it's just talk for now," said Banco Cidade head trader Tomi Taterka.
The company, which has said it is negotiating with various parties about how best to profit from its cable network, said it had nothing further to add for now.
Federal bank Banco do Brasil (SAO:BBAS4) was another stellar performer, jumping 11.2 percent to 10.83 reais. Telemar (SAO:TNLP4) (NYSE:TNE), the market's heaviest-weighted stock, gained 2.1 percent to 32.57 reais after spending most of the day in the red.
Leading pulp maker Aracruz (SAO:ARCZ6) (NYSE:ARA) also rose 3.2 percent to 4.23 reais despite posting a worse-than-expected 70 percent decline in second quarter net income on the back of poor international demand for paper pulp.
Steelmaker Gerdau (SAO:GGBR4) was another gainer, ending 6.5 percent firmer at 15.60 reais after posting a 6 percent gain in net profit as its overseas earnings were magnified in local terms by the weakness of the local currency.
The currency market did not share the stock market's optimism about Argentina as the Brazilian real currency chalked up its second consecutive record low close at 2.50 per dollar, some 28 percent below where it began the year. saopaulo.newsroom@reuters.com))
Copyright 2001, Reuters News Service |
