Brazil real, stocks firm after Bernanke testimony

Thu Feb 28, 2008 4:28pm EST
(Updates to close)
SAO PAULO, Feb 28 (Reuters) - Brazil's currency and stocks closed marginally firmer on Thursday in volatile trading after U.S. Federal Reserve Chairman Ben Bernanke raised concern over the health of some banks because of the housing sector woes.
The Bovespa index .BVSP of the Sao Paulo Stock Exchange gained 0.09 percent to 65,555.08 points, helped by a rise in stocks of mining giant Vale, while Wall Street shares fell after Bernanke told a Senate committee there probably will be bank failures as the housing slump takes its toll.
Brazil's real BRBY, gained 0.06 percent to 1.67 per U.S. dollar. The currency has strengthened for nine straight sessions, up nearly 5 percent in the period.
"The trend (for the exchange rate) is to strengthen more," said Marcos Forgione, a analyst at the Hencorp Commcor brokerage.
Interest-rate futures <0#dij:> on the BM&F commodities and futures exchange in Sao Paulo edged higher.
On the stock market, Vale (VALE5.SA: Quote, Profile, Research), the second most heavily-weighted stock in the index, rose 2.24 percent to 52.5 reais. Talks between Vale to take over rival Xstrata hit an impasse, a source close to the situation said. For details see [ID:nL28684659].
The takeover of Xstrata would increase Vale's debt.
Vale reports fourth-quarter results after the close of markets on Thursday and analysts surveyed by Reuters expect a 44 percent jump in US GAAP net income from a year earlier.
State oil company Petrobras (PETR4.SA: Quote, Profile, Research) -- the Bovespa's main heavyweight -- rose 0.53 percent to 86.15 reais as crude prices surged nearly 3 percent to an all time high above $102 a barrel in New York.
Brewer AmBev (AMBV4.SA: Quote, Profile, Research) rose 2.66 percent to 146.8 reais. The company, part of the world's biggest brewer InBev, said on Thursday its fourth-quarter net income edged 4.1 percent lower to 1.13 billion reais because of foreign exchange losses on investments in units outside of Brazil.
Telecoms group Oi Participacoes (TNLP4.SA: Quote, Profile, Research) edged up 0.11 percent to 44 reais. The company said on Thursday its fourth-quarter profit jumped 48.6 percent and grew by 80 percent for the year of 2007, buoyed by strong growth in its mobile and broadband Internet business.
Vivo (VIVO4.SA: Quote, Profile, Research), Brazil's biggest wireless phone company, tumbled 5.02 percent to 10.6 reais. Portugal Telecom's Chief Executive Henrique Granadeiro said the company has no plans to sell its stake in Vivo, which it co-owns with Spain's Telefonica. (Reporting by Elzio Barreto and Silvio Cascione; Editing by Diane Craft)