|
Latin American stocks dropped, alongside lackluster trading in U.S. equities following two days of gains. Investors were cautious amid fears of monetary policy tightening, after the Brazilian central bank released hawkish minutes from last week's meeting.
Also, the Bank of Mexico will decide this Friday, January 28, whether to tighten its monetary policy. Brazil's benchmark Bovespa Index tumbled 500.46 points, or 2.04%, while Mexico's benchmark Bolsa Index shed 58.65 points, or 0.45%. Argentina's Merval Index climbed 23.11 points, or 1.71%.
Brazilian equities slumped, pressured by the likelihood of even higher interest rates.
Brazil's central bank published the minutes of last week's rate-setting meeting, saying it is prepared to hike the benchmark interest rate further to bring stubborn inflation expectations in line with its 2005 targets.
Analysts noted that rates at the current level of 18.25% are already too high to encourage investors to pick up shares. Economic news further spurred interest rate worries.
The Brazilian General Price Index rose 0.39% in January, down from the 0.74% in December, according to the independent Getúlio Vargas Foundation.
However, the consumer component of the IGP-M climbed 0.80%, following a 0.58% increase in the prior month, as education costs soared ahead of the start to a new school year.
Turning to the airlines group, low-cost carrier Gol Linhas Aereas Inteligentes SA confirmed its has exercised an option to buy four 737-800 Next Generation aircraft from Boeing, as announced in December.
Additionally, senior Gol executives told an aviation conference that the company is in a solid financial position to request new routes, with plans for at least four new domestic destinations and one new international route in 2005.
Maurício Fernandes, an analyst with Merrill Lynch downgraded Telesp Celular Participações to "neutral" from "buy."
The analyst explained, "Fundamentals have substantially deteriorated since August, and because we see no signs of significant improvement on the horizon." That stock fell in response.
Elsewhere, Mexican shares declined as investors logged profits at the last minute. Earlier, the local market advanced to a record intraday high as pension funds managers, know as Afores, resumed their investing.
Traders commented that some of the Afores were not prepared last week when the first of the pension funds made their debut on the market, which lifted the IPC to a record high.
Separately, market watchers remain divided on whether the Bank of Mexico will tighten monetary policy for the seventh straight month this Friday.
On the earnings front, conglomerate Alfa SA stated that robust demand in all its business lines and additions to its food business spurred sales and profits higher in the fourth quarter.
Alfa's net earnings, including results from steel unit Hylsamex, which is in the process of being spun off, jumped to 1.91 billion pesos in the quarter from 16.7 million pesos the year before.
Also, Hylsamex posted a fourth-quarter net profit of 2.66 billion pesos, versus a loss of 675.8 million pesos in the year-ago period.
Shares of Mexico's Coca-Cola Femsa SA were active, amid talk that the bottler won an injunction against a three-year old tax on products with high fructose corn syrup.
Prior to the tax, the company used HFCS to sweeten the majority of its soft drinks.
Also, Grupo TMM announced that a court has ruled that the government must include interest and inflation costs in a tax rebate claim made by the Mexican transport company's rail unit.
Separately, Argentine stocks extended their rally, as anticipation of some pending developments in the government's US$103 billion debt restructuring revived investor enthusiasm.
A three-week preferential period for small bondholders concludes next week, and market players are eagerly anticipating some concrete numbers.
Also, some analysts attributed the recent advance to the fact that Argentine shares remain cheap in U.S. dollars when compared to other emerging markets.
Thomson Financial Corporate Group
http://www.thomsonfinancial.com
PRNewswire
 |
Subscribe to this comment's feed
Brazil received a huge boost in its international image with its selection as the host of the 2016 Olympics, but it was really just the cherry on top of the overall recognition of the country's ascension to the ranks of one of the world's most important countries. Now, as it finally takes its place on the world scene, there has been a great deal of concern about what kind of image Brazil hopes to project, now that the world is really paying attention. 
The only good thing to say about the visit to Brazil of Iran's president, Mahmoud Ahmadinejad, on Monday November 23, is that it was mercifully short and lasted less than 24 hours. Ahmadinejad had his picture taken being hugged by president Luiz Inácio Lula da Silva who gave him a warm welcome and said Iran had every right to develop nuclear energy for peaceful purposes. 
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose.