Brazil shares seen buoyed by local rate cut hopes
Reuters, Wednesday, May 19, 1999 at 09:06
SAO PAULO, May 19 (Reuters) - Brazilian shares were
expected to post gains at the start on optimism the Central
Bank would trim its Selic reference rate at its monetary policy
committee meeting on Wednesday, traders said.
Sao Paulo's benchmark Bovespa stock index (INDEX:$BVSP.X) closed
0.96 percent higher at 12,268 points Tuesday rallying back on
the domestic rate cut hopes after a slump caused by news of a
Federal Reserve bias toward raising U.S. rates if needed.
In general, however, Brazil's market was relieved the Fed,
as the U.S. central bank is known, did not raise rates because
of recent inflation data at its Open Committee Meeting Tuesday.
"The market should open with gains on the expectations of
the rate cut today. In relation to the Fed decision yesterday,
investors have assimilated it well," one trader said.
Analysts say Brazil's Monetary Policy Committee (Copom) is
likely to lower the Selic to between 24 and 25 percent from the
current 27 percent. The Copom starts at 4 p.m. (1900 GMT).
The Central Bank has already cut the Selic from 45 percent
over the last two months amid optimism Brazil has turned the
corner on a currency crisis that hit in mid-January.
The Bovespa has been boosted by that optimism recently,
gaining 8 percent to date in May.
rio.newsroom@reuters.com))
Copyright 1999, Reuters News Service
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