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Brazil shares end up on rating, earnings optimism

RIO DE JANEIRO: Brazilian shares inched up Tuesday amid positive 1999 corporate earnings and optimism after a leading rating agency raised its outlook on Brazil debt, traders said.

Sao Paulo's benchmark Bovespa stock index rose 0.7 percent to 17,660 points, though it is still down 0.7 percent so far this week as trading begins to taper off ahead of Carnival holidays.

"News has been good, pushing the market up, but gains are limited because the Bovespa has already risen so much this month," Carlos Hokama, a fund manager at Credibanco said.

The index surged 7.8 percent in February and is up 3.3 percent in 2000. It extended gains Tuesday after Standard & Poor's raised the outlook on Brazil's foreign currency rating to positive from neutral, indicating a rating upgrade could be on the way.

A handful of companies that reported strong earnings, like mobile phone operator Tele Centro Oeste, led the gainers. Tele Centro Oeste surged 6.6 percent to 5.18 reais, getting an extra boost after Morgan Stanley Dean Witter raised its price target on the company's shares.

Poultry producer Perdigao ended up 2 percent at 2.55 reais after reporting a 1999 net income of 47.2 million reais.

Fixed-line telephone operator CRT also jumped Tuesday on news Tele Centro Sul raised its stake in the company, bringing an end to an ownership feud with Spain's Telefonica and partners. CRT closed up 7.3 percent at 665 reais.

The market was held back from stronger gains, however, by steep declines in some key stocks.

Pay TV operator Globocabo, which has become one of the Bovespa's four most-traded stocks since announcing aggressive Internet plans, closed down 6.5 percent at 3.43 reais on speculation it will post lackluster 1999 results, traders said.

Steelmaker Cia Siderurgica Nacional, one of Latin America's biggest steel makers, also slumped 1.3 percent to 54.10 reais after posting a lower net profit for 1999 than for the year previous.

Trading was slow at 694 million reais, compared with daily average volume of 1.05 billion reais in January. -Reuters