Brazil shares cut losses as profit-taking falters
Reuters, Thursday, January 21, 1999 at 12:04
SAO PAULO, Jan 21 (Reuters) - Brazilian shares reined in a
downward plunge at midday Thursday after a sell-off on a slide
in the currency against the dollar lost steam, traders said.
"There was some normal profit-taking, but the shares are
still looking really cheap," a trader at a local bank said.
The blue-chip Bovespa share index (INDEX:$BVSP.X) was down 2.85
percent at 7,456 points when trading resumed after the lunch
break at 1430 local/1130 EST/1630 GMT.
Shares earlier sank more than 6 percent as the newly
devalued currency lost even more ground to the dollar despite
Congress approving a key reform last night.
The vote, passing a thorny pension reform measure seen as
vital to the government's fiscal austerity drive, had been
anticipated by the market.
Some correction in stocks had been expected after the
market gained more than 50 percent in the last four sessions
since the government let the currency float.
At an individual share level, electric utility Eletrobras
(SAO:ELET6) preferred was looking attractive, traders said. It
was even showing some gains at midday but was off 0.78 percent
at 25.50 reais at 1450 local/1150 EST/1650 GMT.
Other liquid stocks were also being eyed favorably.
The Bovespa was back down 3.72 percent at 7,389 points at
1450 local/1150 EST/1650 GMT in what traders said would
continue to be a volatile session.
Copyright 1999, Reuters News Service
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