20000226

Brazil shares slip 0.3 pct as Wall Street slumps

SAO PAULO: Brazilian shares shed 0.3 percent Thursday, dragged down by Wall Street on nagging concerns over another potential US interest rates hike that could slow investment flows to Brazil, traders said.

Sao Paulo's benchmark Bovespa stock index ended at 17,776 points, retreating from early gains made after a statistics institute reported the first signs of deflation since June.

"Dow Jones and Nasdaq got in the way again," said Gabriel Scrimini, a trader at Tudor brokerage in Sao Paulo. The Dow Jones industrial average was down 2 percent and even the usually buoyant Nasdaq was seesawing near unchanged.

In Brazil, Telebras preferred receipts, a basket of telephone shares that accounts for up to 40 percent of trade, closed down 0.8 percent at 256 reais.

The electricity sector, which has been hit by a switch from power stocks to telephone stocks, led the market's decline. The Bovespa's Electric Energy Index fell 2.3 percent.

State holding company Eletrobras ended down 1.8 percent at 33.60 reais while electricity distribution firm Light Servicos sank 4.3 percent to end at 242 reais.

Potential Internet players that showed strong gains Wednesday also tumbled amid profit taking Thursday. EPTE electricity transmission company ended off 8.7 percent at 21.90 reais.

Retail Itau bank shrugged off market fears, closing up 3.7 percent at 140 reais after launching $100 million in two-year bonds Thursday morning.

State oil giant Petrobras ended up 2.7 percent at 457 reais. The oil company said it will sign Monday a $293 million 15-year loan package to finance exploration and lengthen its debt portfolio.

Trading was on the low side at 805 million reais compared with daily average volume of 1.05 billion reais in January.

The Bovespa is still up 8.4 percent so far this month and has accumulated 4 percent gains so far in 2000.-Reuters