Brazil shares seen little boosted after elections
Reuters Story - October 05, 1998 08:29
SAO PAULO, Oct 5 (Reuters) - Brazilian shares on Monday were seen getting a little lift from Sunday's election results, where President Fernando Henrique Cardoso appeared to have won an historic re-election, brokers said.
"Election results may give a little boost to the market today, but nothing explosive. Cardoso's victory was pretty much factored in on Friday's rise," said Roque Ribeiro, fund manager at Banco Marka in Rio de Janeiro.
Sao Paulo's key Bovespa index had surged 7.53 percent to close at 6,410 points on Friday as the government was seen buying stocks to boost the market ahead of the vote.
Cardoso had won 50.42 percent of the ballots versus 34.86 percent for left-wing opponent Luiz Inacio Lula da Silva with 52.64 percent of the 106 million ballots counted in Sunday's general elections.
Cardoso's apparent victory would soothe foreign and local investors worried about the economic fate of Latin America's largest economy, brokers said.
However, players were quickly shifting their focus to a possible announcement of an international aid package for Brazil and hints on fiscal obligations the government must come up with to secure such aid.
Brazilian Finance Minister Pedro Malan was quoted by a leading newspaper on Monday saying fiscal stabilization measures would be announced in "a few days".
"Without any developments on the packages, we'll simply have to follow trends in overseas markets," said one trader.
For that reason, Brazilian shares were seen vulnerable to overnight falls posted in Asian bourses, especially in Japan, brokers said. In Tokyo, the blue-chip Nikkei average dipped below the 13,000-point threshold for the first time since January 1986 as investors were disappointed the Group of Seven failed to offer concrete solutions to world financial woes.
Blue-chip activity Friday:
Telebras receipts up 10.98 pct at 82.90 reais
Petrobras up 5.41 pct at 117 reais
Eletrobras up 6.22 pct at 23.90 reais
Vale do Rio Doce up 10.12 pct at 18.50 reais
Bovespa:
* Friday: off 7.53 pct at 6,410 points
* Week: off 4.4 pct
* Month: off 2.7 pct
* Year-to-date: off 37.1 pct
SELIC (open): 4.08 pct
Dollar/Real (open): 1.1860 per dollar
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