Brazil stocks close down 8.61 pct, a two-year low
Reuters, Thursday, September 03, 1998 at 17:09
SAO PAULO, Sept 2 (Reuters) - Brazilian stocks tumbled on
Thursday to close off 8.61 percent at a two-year low after
Moody's Investors Service downgraded the country's speculative
credit rating.
"The market was negatively affected by Moody's downgrade,"
a trader at Tudor Asset Management said.
Sao Paulo's key Bovespa index of the 57 most-traded shares
tumbled 586 points in its second biggest drop this year to
close at 6,219 points. The Bovespa has not closed that low
since August 27, 1996.
Moody's announced Thursday it was downgrading its ceiling
for Brazilian foreign currency bonds and notes to B2 from B1
and the ceiling for foreign currency bank deposits to Caa1.
The resulting plunge in Brazilian stocks and the de facto
Colombian currency devaluation unnerved investors, dragging
U.S. equities down with them, traders in New York said. The Dow
Jones slipped 1.29 percent to 7,682.22 reais.
Earlier in the day, U.S. Treasury Secretary Robert Rubin
said that world financial turmoil has had some spillover effect
on Latin America, and that developments in the region were
"profoundly important" to the United States.
Brazilian bank Banespa (SAO:BESP4) preferred led declining
stocks on the Bovespa. The bank's shares plummeted 13.51
percent to 32 reais as a single investor sold a big chunk of
stock, traders said.
"One investor made a big withdrawal," a trader said.
Other big decliners included Telebras (SAO:TELB3) common
shares, which fell 13.33 percent to 52 reais and Cesp
(SAO:CESP4) utility, which tumbled 11.67 percent to 15.90 reais.
Among Blue-chip stocks, Telebras (SAO:TELB4) preferred
plunged 10.29 percent to 76.70 reais.
Moody's announced Thursday it was downgrading its ceiling
for Brazilian foreign currency bonds and notes to B2 from B1
and the ceiling for foreign currency bank deposits to Caa1.
The resulting plunge in Brazilian stocks and the de facto
Colombian currency devaluation unnerved investors, dragging
U.S. equities down with them, traders in New York said. The Dow
Jones slipped 1.29 percent to 7,682.22 reais.
Earlier in the day, U.S. Treasury Secretary Robert Rubin
said that world financial turmoil has had some spillover effect
on Latin America, and that developments in the region were
"profoundly important" to the United States.
Brazilian bank Banespa (SAO:BESP4) preferred led declining
stocks on the Bovespa. The bank's shares plummeted 13.51
percent to 32 reais as a single investor sold a big chunk of
stock, traders said.
"One investor made a big withdrawal," a trader said.
Other big decliners included Telebras (SAO:TELB3) common
shares, which fell 13.33 percent to 52 reais and Cesp
(SAO:CESP4) utility, which tumbled 11.67 percent to 15.90 reais.
Among Blue-chip stocks, Telebras (SAO:TELB4) preferred
plunged 10.29 percent to 76.70 reais.
State-owned oil company Petrobras (SAO:PETR4) tumbled 5
percent to 133 reais and energy holding company Eletrobras
(SAO:ELET6) slumped 8.41 percent to 18.60 reais. Iron ore miner
Cia Vale do Rio Doce (SAO:VALE5) fell 8.88 percent to 15.40
reais.
Shares worth 604.8 million reais traded hands, in line with
average daily trading over the last three months.
Copyright 1998, Reuters News Service |
