Brazilian shares tumble over 2 percent by midday
Monday August 31, 12:05 pm Eastern Time
RIO DE JANEIRO, Aug 31 (Reuters) - Brazilian shares
tumbled more than 2 percent at midday Monday tracking foreign markets unhinged by further
political and economic uncertainty in Russia, traders said.
Trading volume was very thin with few takers as investors stayed away from emerging markets
in general, but traders did not expect Brazil's shares to drop more than 3 percent.
There was speculation that the government was buying the leading share Telebras (TELB4.SA)
to help support the bourse.
The Bovespa (^BVSP - news) index of the 58 most traded shares fell 2.36 percent to 6,587
points at 1132 local/1432 GMT.
''Nothing is happening here, there are just no inflows to emerging markets,'' a trader at Bozano,
Simonsen bank said.
Brazilian share prices have plummeted nearly 40 percent in August, wiping out the gains of the
past two years, as investors pulled out of emerging markets on fears the crisis in Russia would
spread.
The Bovespa recovered a bit late Friday and traders had expected that it could recoup more if
things remained quiet overseas. But European markets led a trend downward Monday after a
top Kremlin aide warned that Russia was heading toward a political revolution.
Brazil's C-bonds, widely regarded as an emerging market benchmark, were off 0.6 points at
52.1 percent at midday. For economists, the main concern is whether the country will be able to
roll over its large public debt in the short term.
Telebras (TELB4.SA) shares were falling 1.94 percent to 86.00 at midday while bluechips
Petrobras (PETR4.SA) were down 4.0 percent to 120.00 reais and Eletrobras (ELET6.SA)
was off 6.23 percent at 17.91 reais.
Mining giant Vale do Rio Doce (VALE5.SA) was down 0.69 percent at 15.89.
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BRSP BOVESPA IND (^BVSP - news)
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