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Brazil stocks close lower after seesaw trade

SAO PAULO: Brazilian stocks ended on Thursday in negative territory after a day of seesaw trading heavily influenced by events in the US, traders said.

Sao Paulo's benchmark Bovespa index finished 0.7 percent lower at 17,979 points, just below the psychologically important 18,000 point barrier, which the index crossed several times during the day.

"The market fluctuated all day long on things being released or said in the US," said Carlos Hokama, chief of equities at Credibanco.

"It was at its strongest early in the day when a very positive wholesale price index came out there. But after (US Federal Reserve Chairman Alan) Greenspan's new warnings about inflationary risks, there was some profit-taking and stocks here retreated."

Greenspan said in congressional testimony that higher interest rates may be needed to keep the world's biggest economy from overheating.

Higher US interest rates normally depress emerging economies like Brazil's because they lure investors away and into safer US securities.

But Brazil's stock market is still one of the best performing in the world. The Bovespa is up 9.7 percent so far in February and 5.2 percent since January 1.

Trading volume Thursday was low at just above 700 million reais ($400 million), well below Wednesday's 1 billion reais ($568 million).

Among the day's top attractions was Unibanco, which rose 2.4 percent to 59.5 reais after reporting a 30 percent rise in its 1999 net profit.

Analysts said the results of Brazil's third largest private bank were positive, especially in terms of income growth, cost reduction and better asset quality.

Brazil's Celpe electric utility also gained sharply, by 3.5 percent to 8.9 reais, after a consortium led by Spanish power company Iberdrola agreed to buy a controlling stake in the firm at a privatisation auction on Thursday morning. The $1 billion sale, however, failed to spark a rise across the electricity sector.

Oil giant Petrobras lost 1.1 percent to close at 450 reais as investors skimmed profits after a 6.3 percent rise in the share price on Wednesday. Petrobras has risen sharply in the past few days on good 1999 results and expectations a price rise on the world oil market would benefit the state-owned company.-Reuters