Political Risk Latin America Blog @PolRiskLatam

Bovespa Stock Index Fluctuates as Global Growth Concern Offsets Rate Bets

Posted in News and Articles by politicalrisklatam on August 9, 2010

by Alexander Cuadros for Bloomberg, August 9th, 2010.

The Bovespa stock index fluctuated between gains and losses as concern global economic growth is slowing offset speculation that Brazilian borrowing costs will rise less than previously estimated.

Retailer Lojas Renner SA and homebuilder Cyrela Brazil Realty SA Empreendimentos e Participacoes advanced as the prospect of slower interest-rate increases boosted the outlook for credit demand. Card-payment processor Cielo SA jumped after shareholders said government-controlled Caixa Economica Federal may increase its stake, while rival Redecard SA slid. B2W Cia. Global do Varejo, Brazil’s largest online retailer, tumbled after its rating was cut at HSBC Holdings Plc.

The Bovespa fell 0.1 percent to 68,051.51 at 12:25 p.m. New York time. Thirty-nine stocks dropped on the measure while 26 gained. The real strengthened 0.4 percent to 1.7535 per dollar.

“In the long term, lower rates will help the stock market,” said Leonardo Boguszewski, who helps oversee 380 million reais ($216 million) as fund manager at Parana Banco Asset Management in Curitiba, Brazil. “The local economy has shown momentum, which should continue as the rest of the world recovers more slowly. We think the flow will tend to be positive through the end of the year.” (continue reading… )

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