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Brazilian stocks end firmer amid caution on US rates

SAO PAULO: Brazilian stocks finished firmer Wednesday after shadowing share price movements on Wall Street amid persistent concerns about rising US interest rates, traders said.

The Sao Paulo Stock Exchange's Bovespa index of leading shares ended 0.8 percent higher at 17,105 points, in line with the Dow Jones industrial average. The US blue-chip gauge was about 0.5 percent higher by the time the Brazilian bourse closed.

"The market was really just accompanying Wall Street," said Gabriel Jafet, fund manager at Oryx Asset Management. "The ongoing uncertainty over US interest rates was making investors reluctant, especially with Greenspan speaking near the close."

US Federal Reserve Chairman Alan Greenspan began an address to the Senate Banking Committee shortly before the Brazilian market closed, and investors were listening for clues to the Fed's thinking on interest rates.

Higher US rates could lure foreign investment out of Brazil, making yields in the riskier emerging market instruments less attractive.

A series of large transactions involving Brazilian electric utilities on Wednesday boosted the market's total turnover to 3 billion reais, or $1.8 billion.

Brazil's National Development Bank (BNDES) sold 1.9 billion reais ($1.1 billion) of shares in Eletropaulo Metropolitana, the majority of which went to the company's controlling owner, US-based AES Corp. Metropolitana's preferred share dipped 0.4 percent to 115.10 reais, with investors reading the increase in AES's stake as a possible precursor to a restructuring in the utility's ownership, traders said.

A similar BNDES auction of Light shares was also planned for Wednesday, but the results had not come out before the bourse's close. Light's common stock dropped 12 percent to 214.5 reais.-Reuters