Brazil shares firm on Wall St, unmoved by IMF deal
Reuters, Wednesday, October 21, 1998 at 00:47
SAO PAULO, Oct 20 (Reuters) - Brazilian stocks closed firm
Tuesday, tracking a rise on Wall Street but barely fluttering
at news that Brazil and the International Monetary Fund (IMF)
had agreed to budget targets, traders said.
The IMF and Brazil issued a joint statement on the fiscal
goals but did not provide specifics on how they would be met.
"The targets announced are within expectations, but it's
not only this that the market wants. What is hoped for is more
detail," one trader said.
The Bovespa (INDEX:$BVSP.X) index of leading shares closed 1.89
percent higher at 6973 points.
Investors have been generally optimistic that an austerity
plan is in the pipeline, but are anxious to know the specific
measures the government will employ to close up a huge budget
hole and restore market confidence.
In the interim, a five-session Wall Street rally -- boosted
further Tuesday by brighter-than-expected earnings reports --
has been the main force driving Brazil share prices.
Strong gains in Bovespa heavyweight Petrobras (SAO:PETR4)
also lifted the market. The state oil firm shot up 7.75 percent
to 153 reais the day after signing its first specific
exploration and production deal with a foreign oil group.
"What distorted the index today was Petrobras, which really
climbed," one trader said. "The actualization of the
partnerships drove up the shares."
Petrobras has lined up dozens of international and local
partners to boost development of its vast untapped reserves now
that the oil sector has been opened up to competition. The
specific deal with a group led by Argentina's YPF was hailed as
a sign that other investment deals were close at hand.
Among other blue-chip stocks, Telebras preferred receipts
(SAO:RCTB40) ended 0.34 percent lower at 88.7 reais, while
state-owned electricity holding Eletrobras (SAO:ELET6) closed
2.96 percent higher at 27.80 reais.
After the market closed, a government spokesman said the
much-anticipated fiscal austerity plan would be announced in
the middle of next week.
Copyright 1998, Reuters News Service |
