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Brazilian stocks end flat as Dow dips below 10,000

SAO PAULO: Brazilian stocks ended mostly flat on Friday as investors watched the Dow Jones industrial average -- a key gauge for most Latin American markets -- dip below the key 10,000-point mark, traders said.

The Sao Paulo Stock Exchange's Bovespa index, a benchmark share index in Latin America's biggest bourse, finished up a mere 0.06 percent at 17,787 points. Turnover in the market was surprisingly low at 640 million reais ($360 million).

"We cannot avoid setbacks here when the US market is suffering," said Carlos Augusto Levorin, fund manager at Oryx Asset Management. "If it were not for the volatile movements in New York, stocks here could actually be rising more."

The Dow slumped, with even the usually resilient technology sector coming under pressure, after a strong showing in its gross domestic product (GDP) reinforced speculation that interest rates will go up sharply.

While Brazil's broad market was pressured by Wall Street, federally owned oil and gas giant Petrobras gained after the government said it will raise the price of gas and diesel oil at the refineries by seven percent due to sharp rises in international oil prices.

Petrobras finished up 2.6 percent at 469 reais.

Some second-tier telecom shares which were left behind in recent rallies also managed to post significant gains. Mobile phone operator Telesp Celular jumped 5.2 percent while land-line Telemig advanced 4.55 percent.

But industry heavyweights like Tele Centro Sul dropped 3.7 percent and Telemar lost 1.2 percent.

The market was also pressured by heavy losses in Brazil's biggest private bank Bradesco, which dropped 4.2 percent due to more fears over US interest rate hikes. Second-ranking Itau bank was down 1.4 percent.

The Bovespa gained 0.9 percent on the week, while it was up 8.6 percent on the month and up 4 percent on the year.

Traders predicted activity to start winding down next week ahead of the annual Carnival festivities. The Carnival parades officially begin in the second week of March this year.-Reuters