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Brazilian stocks end up as Petrobras sparks gains

SAO PAULO: Brazilian stocks closed higher on Wednesday after state oil giant Petrobras led gainers on the back of soaring international oil prices, traders said.

The Sao Paulo Stock Exchange's leading share index Bovespa finished 1.1 percent firmer at 18,112 points with Petrobras' preferred shares a major component in the index -- jumping 6.3 percent to 455 reais in heavy turnover.

"Petrobras stole the scene today," said Tomas Taterka, chief trader at Banco Cidade. "Investors were still buying banks, telecoms, Globocabo...but Petrobras was the feature today."

The market was after Petrobras on speculation the government may hike local fuel prices due to a surge in world crude oil prices to the highest level in nine years.

Petrobras' stock jump led to gains in other traditional blue-chips such as telecoms and in prime second-tier issues like high technology firms and banks, traders said.

Fixed line telephone firm Telemar climbed 3.8 percent to 49.3 reais, while cable television firm Globocabo gained 9 percent to 4.2 reais.

Banco Itau continued to advance after it announced record earnings for 1999 on Tuesday. It rose 4 percent to 142 reais on Wednesday.

Overall turnover on the Sao Paulo bourse was a high 1 billion reais ($563 million) on Wednesday, in part helped by the expiration of Bovespa index futures.

Even so, traders said trading was limited on Wednesday as markets waited for the outcome of a key interest rate policy meeting which began its second day of deliberation just as the market was closing.

The Central Bank's policymakers' committee (Copom) is due to announce a new reference rate for the market's benchmark Selic late Wednesday.

Economists have predicted the Copom to take a rather conservative stance and keep the Selic's reference rate unchanged at 19 percent due to lingering worries over future hikes in US interest rates.

At Wednesday's close, the Bovespa was up 6 percent so far this year and 10.6 percent higher since the beginning of the month.-Reuters