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Brazil shares score fresh gains, driven by telecoms

SAO PAULO: A steady stream of fresh money poured into Brazilian telecommunications stocks on Thursday, driving the country's main index to new gains even as prices on Wall Street dipped, traders said.

The Sao Paulo Stock Exchange's Bovespa Index ended 1.3 percent higher at 18,603 points, just a touch off the record high of 18,671 hit Tuesday.

At the local closing bell, the Dow Jones industrial average was down half a percentage point though the Nasdaq composite index rose 1.3 percent.

"I think we are becoming less linked to Dow Jones and more linked to the Nasdaq," said Gilberto Zalfa, fund manager at Agenda brokerage in Rio de Janeiro. "That makes sense because what is moving us here are the technology stocks."

Zalfa said local buying has also been buoyed by news of low inflation and prospects for economic expansion in 2000 after Brazil battled its way back from a devastating currency devaluation.

The Bovespa, Brazil's main stock exchange, is now up 8.5 percent since Jan. 1. Since the start of February, the bourse has risen 13 percent, with gains being registered during seven of the past eight sessions.

Continuing an earlier pattern, telecom investors saw some of Thursday's most dramatic gains.

Telerj, the Rio de Janeiro telephone operator, jumped 5 percent to 56.35 reais, while benchmark Telebras receipts rose 1.9 percent to 272.99 reais.

Telesp, the Sao Paulo operator controlled by Spain's Telefonica, increased another 2.8 percent to 62.5 reais as the stock of its Spanish parent ended flat after a 4.6 percent gain Wednesday.

The long-battered Minas electric utility Cemig continued to draw back investors who were spooked in recent months by the state government's plan to oust strategic minority shareholders.

Cemig preferred stock rose 2.3 percent to 34 reais, marking its sixth straight day of gains.

"There is a lot of faith in Cemig and I think the share price can reach again the 42-real level," said Zalfa.

Trading volume was healthy at 1.0 billion reais ($570 million), just below Wednesday's 1.1 billion reais ($625 million).-Reuters