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Brazil shrs gain 2 pct, fueled by telecoms, Nasdaq

SAO PAULO: Brazilian shares resumed their upward climb on Wednesday, gaining 2 percent as investors snapped up telecom shares on optimism over strong gains in U.S. technology stocks, traders said.

Sao Paulo's benchmark Bovespa index ended up at 17,833 points. Phone firms and other potential Internet players were the standouts as investors moved to keep in pace with a more than 3 percent rise in the U.S. Nasdaq Composite Index.

"When the Nasdaq is up, telecoms are the first stocks people buy in Brazil," a trader at Opportunity bank in Rio de Janeiro said.

Telebras receipts, which account for up to 40 percent of trading, closed up 3.2 percent at 258 reais. Electricity transmission company and potential Internet player surged 17 percent to end at 23.99 reais.

Signs that a mounting political feud within President Fernando Cardoso's coalition had cooled also helped boost stocks, traders said.

"The internal political scene is turning more positive," one local trader said.

State oil giant Petrobras common stock ended up 3.4 percent at 402.12 reais after the government announced Tuesday plans to sell 32 percent of voting shares - a move that could give minority shareholders more power in the company.

"The July sale date is earlier than the market expected," the Opportunity trader said. "Most people were looking at the end of the year."

Iron ore miner Cia Vale do Rio Doce (CVRD) closed sharply up after reporting a 79 percent jump in fourth quarter net profit that brought the year's earnings to a record high. CVRD rose 3.1 percent to 50.50 reais.

Brazil's largest brewer Brahma, on the other hand, slumped 2.2 percent to 1,135 reais after reporting that its bottom-line profit fell 2 percent last year.

The Bovespa is up 8.8 percent so far this month and 4.3 percent in 2000.

Volume was a bit low with 766 million reais traded compared with daily average volume of 1.05 billion reais in January.-Reuters