Commodity stocks buoy Brazil's Bovespa, real gains

Tue Apr 22, 2008 12:27pm EDT
SAO PAULO, April 22 (Reuters) - Commodity shares helped boost Brazil's benchmark stock index to near two-month highs early on Tuesday, while the local currency gained against the dollar amid expectations of further monetary tightening.
Afternoon trade at Sao Paulo's main stock index, the Bovespa .BVSP, was halted for two hours due to technical failures, one day after Brazilian markets were closed for a public holiday.
Once trade resumed, the Bovespa traded up 1.08 percent at 65,626.09 points, having earlier hit its highest level in almost two months at 65,689.31 points.
Commodity stocks were the biggest-weighted gainers of the index, benefiting from higher metal prices and a new record for oil above $118 a barrel.
Mining giant Vale (VALE5.SA: Quote, Profile, Research) rose 2.32 percent at 52.90 reais and state-run energy company Petrobras (PETR4.SA: Quote, Profile, Research) -- the heaviest weighted stock in the index -- gained 2.1 percent to 87.10 reais.
The Brazilian real BRBY rose 0.84 percent to 1.655 per dollar, one week after the central bank raised interest rates by a higher-than-expected 50 basis points.
A majority of analysts polled by Reuters last week bet the bank would raise rates by another half point in June and such expectations underpinned some longer-term Brazilian interest rate futures <0#dij:>.
Meanwhile, a weekly central bank survey showed local financial institutions revised forecasts slightly upward for 2008 inflation to 4.71 percent from 4.66 percent.
The Bovespa gained even as Wall Street fell on disappointing corporate earnings outlooks, high oil prices and data showing the pace of existing U.S. home sales slipped in March.
Coming a day after weak quarterly results from Bank of America (BAC.N: Quote, Profile, Research), concerns over the fallout from the credit crisis put financial stocks under pressure globally.
In Brazil, banks were the worst performers, with Unibanco (UBBR11.SA: Quote, Profile, Research) down 2.76 percent at 22.17 reais and Banco Itau (ITAU4.SA: Quote, Profile, Research) slipping 0.59 percent to 44.03 reais. (Reporting by Ana Nicolaci da Costa; editing by Gary Crosse)