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Brazil stocks end 4.2 pct down as Nasdaq sags again

SAO PAULO: Brazilian stocks tumbled in the final hour of trading Monday, ending with a thud as selling again snowballed in the Nasdaq Index, traders said.

The Sao Paulo Stock Exchange's Bovespa Index closed 4.2 percent lower at 16,782 points. After gaining 2.1 percent on Friday, the Bovespa opened slightly higher, rising to 17,571 before reversing into negative territory along with the US index. The Nasdaq Index was down 5.8 percent at the closing bell.

"There are really no technical reasons for this correlation since our stock market is not hi-tech," said Carlos Levorin, a partner at Clickinvest. "But it seems to be the fashion to follow the Nasdaq."

The Bovespa is down 5.8 percent so far in April and 1.8 percent since Jan. 1 after hitting record highs above 19,000 just two weeks ago.

The few technology stocks in the Bovespa were among the hardest hit.

Cellular telephone operator Telesp Celular plunged 8.3 percent to 32.45 to top the list of losers on the Bovespa.

Benchmark Telebras receipts were close behind, slumping 6.6 percent to 234.49 and accounting for 34 percent of total volume.

Long distance operator Embratel sagged after rising sharply Friday on speculation that MCI Worldcom would buy the Embratel shares it does not own. Embratel preferred dropped 5 percent to 41.92 reais.

Cable TV and Internet company Globocabo shed 6.19 percent to 2.88 reais after touching 3.4 reais two weeks ago.

One of the few winners was brewer Brahma, which inched up 0.9 percent to 1,435 reais as it continued to ride on the approval 10 days ago of its merger with Antarctica. Brahma managers clinched seven of the top eight positions in the newly formed AmBev, the world's third largest brewer.

Traders noted that local volume was very low at just over 500 million reais ($300 million), bolstering last week's widespread fear that business would drop off sharply.

Traders said nervousness over Wednesday's futures expiry on the Bovespa index and next Monday's options expiry were also keeping people out of the market this week.

"No one wants to risk until that is over," said one trader.

Levorin said many futures players are discouraged from rolling over positions in the Bovespa because of upcoming changes to the index. -Reuters