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Brazilian stocks end up on internet fever, buyback

RIO DE JANEIRO: Brazilian stocks closed out a wobbly week with gains on Friday as local investors flooded the market snapping up Internet-related stocks and as U.S. Whirlpool bought out its local units, traders said.

"There was a huge amount of position-swapping today, mainly by local investors," said Heitor Lima, head of equity sales at Fleming Graphus. "We also had the Brasmotor buyback which helped push up the volume."

Sao Paulo's Bovespa .BVSP index of leading shares closed 1.26 percent higher at 16,309 points on Friday after a rocky week that had the market swinging in step with the whims of a Wall Street worried about a hike in U.S. interest rates.

The Bovespa had finished last year with a whopping 152 percent gain, but investors cashed in on profits this week to for an accumulated loss of nearly six percent. The index had its biggest one-day point drop in a year on Tuesday, when it crashed down 6.4 percent in step with a shaky Wall Street.

The big index booster on Friday was U.S.-based Whirlpool Corp.'s repurchase of the outstanding publically traded shares in its Brazilian appliance manufacturing affiliates -- Brasmotor and Multibras.

Traders said the Brasmotor deal alone accounted for more than 500 million reais in trade to help boost total volume to well over 1 billion reais after an average daily volume of 916 million reais in December.

The other big movements on Sao Paulo's Stock Exchange seemed to be related to the market's recent appetite for companies that are positioning themselves to take advantage of Brazil's burgeoning Internet business.

Shares in banks Unibanco and Bradesco, which had been hot property in recent sessions after Unibanco joined Bradesco in offering clients free on-line access, got hit by profit-taking in heavy trade on Friday.

But the local bank Itau , which is rumoured to be ready to make an Internet access offer, continued to be a market favourite, shooting up 6.08 percent to 157 reais.

Preferred shares in state-controlled power grid giant Eletrobras also outpaced the Bovespa to close with a 3.04 percent advance to 42.66 reais.

"Eletrobras is up, Itau is up, everything seems to be related to the market's Internet fever right now," Lima said.

Next week, Brazil's markets should still be tied to the mood on Wall Street with some gains expected early depending on U.S. indicators ahead of a meeting of the rate-setting Federal Open Market Committee of the U.S. central bank at the beginning of next month.

Locally, the Central Bank's Monetary Policy Committee meeting on Jan. 19 to decide on rates, may also become a big factor with Brazilian inflation figures playing a role.-Reuters