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Brazil stocks end lower, hostage to US declines

SAO PAULO: Brazilian stocks remained hostage to sagging US equity markets Tuesday, ending 2.1 percent lower in light turnover and extending losses over the last two days to 6 percent, traders said.

The Sao Paulo Stock Exchange's leading stock index Bovespa finished trading at 17,222 points on turnover of 700 million reais ($400 million), dragged down by a 200 point drop in the Nasdaq index and 136 point slide in the Dow Jones industrial average.

"You just take one peek at what's going on in overseas markets and you'll feel like selling here," said Gabriel Jafet, fund manager at Oryx Asset Management in Sao Paulo. "The market is full of sellers."

By Tuesday's close, the Bovespa index had fallen 2.5 percent so far this month, while it was up just 0.8 percent so far this year.

Most blue-chips in the Bovespa index fell, with the heavily weighted Telebras preferred receipts plunging 3.9 percent to 247.45 reais and oil giant Petrobras preferred falling 2.7 percent to 465 reais.

Mobile telephone operator Telesp Celular common stock was one of the few exceptions, jumping 30.7 percent to 28.2 reais per 1,000 shares as investors adjusted prices following a tender offer by Portugal Telecom.

Portugal Telecom said on Tuesday that it was offering 30 reais for each 1,000 shares of Telesp Celular common stock, which represented a premium of about 39 reais over the last closing price.

But Telesp Celular's more liquid preferred stock dropped more than the broader market, losing 5.8 percent to 33.4 reais.

Brazil's largest private bank Bradesco also bucked the general trend, rising 4.3 percent to 14.6 reais, as investors bet on the bank's restructuring plans.

Bradesco said it planned to spin off a holding company that would group its participation in major local firms, ranging from steelmakers to pay television.

The bank was to form Bradespar S.A. Holding, which would bring together Bradesco's stakes in giants like iron ore miner Cia Vale do Rio Doce, steelmaker Cia Siderurgica Nacional and cable TV firm Globo Cabo. -Reuters