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Brazilian shares end lower, pausing after record run

SAO PAULO: Brazilian stocks closed down 0.9 percent on Monday, the first trading day of 2000, as investors booked profits after 10 sessions of gains that pushed share prices to a record high, traders said.

Sao Paulo's Bovespa index retreated to 16,930 points, dragged down by Telebras preferred receipts, which fell after the market announced a reconfiguration of the benchmark index that gives a lower weighting for the receipts, effective Monday.

Telebras closed down 3.8 percent to 228.50 reais as its weighting in the index fell to 33.9 percent from 38.6 percent. A handful of other telephone companies also suffered losses after posting steep gains in recent sessions.

"A decline in shares in New York opened the door for some profit-taking here," said Enrico Porta, a fund manager at Credibanco in Sao Paulo. "Everybody is waiting for a big inflow of foreign investors, but it hasn't started yet."

On Wall Street, the Dow Jones industrial average was down 1.2 percent just before the close, coming off a record high amid renewed concerns over rising interest rates.

Telephone stocks took the biggest hits on Monday with Telesp Celular ending down 10.4 percent at 128.16 reais and Tele Norte Leste off 6.8 percent at 45.20 reais.

Some of the Bovespa's darlings at the end of 1999 bucked Monday's downward trend and climbed to fresh highs.

Supermarket chain Pao de Acucar closed up 5 percent at 63 reais while Globex, which owns electronic goods chain, ended up 6.9 percent at 15.50 reais. Both are expected to benefit from the Internet craze by generating more revenues with online sales.

Markets were still optimistic that foreign investors will pour into Brazil now that Y2K fears have passed, traders said.

Trading on Monday was solid at 708 million reais, compared with daily average turnover of 780 million reais in November. The December average still has not been announced.-Reuters