Brazil shares firm despite Argentina carnage
Reuters, 07/12/2001 19:32
SAO PAULO, July 12 (Reuters) - Brazil's beleaguered stock index rose for the second session in a row on Thursday, bucking Argentine-inspired carnage in emerging markets with support from cheap prices and firm gains on Wall Street, traders said.
The Sao Paulo Stock Exchange's benchmark Bovespa (INDEX:$BVSP.X) index ended 0.75 percent firmer at 13,916. The market rose despite decliners outweighing gainers by 30 to 25, leaving the index 8.8 percent weaker than where it began the year.
The Bovespa held up despite an 8.2 percent dive by neighboring Argentina's MerVal <.MERV> stock index after earlier hitting five-year lows on the back of fears the recession-hit country would default on its mountain of debt.
"The main factor is the market is extremely oversold," said Banco Cidade head of sales Alvaro Teixeira. Gains by U.S. stocks after some surprisingly firm corporate earnings news also lifted the Brazilian index, he said.
In the local market, Brazilian drinks giant AmBev (SAO:AMBV4) (NYSE:ABV) was among the market stars, jumping 8.1 percent to 515 reais.
The shares rallied after it launched Guarana Antarctica, its biggest selling soft drink in Brazil, in Portugal in a first step toward an ambition to sell it across the world.
Elsewhere, the Bovespa was mixed across sectoral lines.
Telemar (SAO:TNLP4) (NYSE:TNE), Brazilian market heavyweight and the country's biggest fixed-line telephone operator, supported the index with a 2.9 percent gain to 33.52 reais, but other telecoms suffered.
One of the hardest hit telecoms was heavily-traded mobile phone operator Telesp Celular (SAO:TSPP4) (NYSE:TCP), controlled by Portugal Telecom (LIS:PTCO), which sank 6.4 percent to 12.96 reais.
Traders said talk that Brazil was asking for cash from the International Monetary Fund (IMF) to help it buttress its economy from the worries of fiscal insolvency and debt default in neighboring Argentina had also proved supportive.
But late in the session, the IMF's Claudio Loser, the head of the fund's Western Hemisphere Department, said that Brazil did not qualify for its Contingency Credit Line, a lending facility designed to help economies hurt by crisis in other countries.
Argentina's economic problems have clouded the outlook for emerging markets this week, driving Brazil's real currency to three consecutive record low closes despite repeated Central Bank interventions to support the unit.
Stock traders pointed out that the market's recent modest gains should be seen in the light of the real's 31 percent loss of value since the start of the year.
"In dollar terms, we're going down," Teixeira said. saopaulo.newsroom@reuters.com))
Copyright 2001, Reuters News Service |
