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Americas swayed by U.S.
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May 23, 2000: 7:19 p.m. ET
Intraday gains in Brazil, Mexico can't withstand Nasdaq; techs burden Toronto
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NEW YORK (CNNfn) - Tied to the United States Nasdaq stock index, markets in the Americas again closed in negative territory. While the early trading sessions seemed to indicate the potential for a modest recovery from yesterday's plummet - due to improvements in volume and trader interest - Nasdaq's pull kicked in by the close, spurring a continuation of the trend in the selling of tech and other internationally-attractive issues.
Taking a cue from the United States Nasdaq, the Brazilian Bovespa stock index dropped 2.2 percent, mostly on the weight of sharp declines in the last hour of trading. Today's fall was somewhat cushioned in relation to the United States, as a result of the Bovespa's U.S.-index exceeding decline yesterday. While oil, utility and telecom stocks managed to survive the carnage, media stocks were hit particularly hard.
Although bargain-hunting kept the Mexican IPC index in positive territory for most of the day, the pull of plunging techs in the United States was eventually powerful enough to drag the market down to a negative 1.11 percent close. This was the bolsa's third straight six-month record low finish.
In a delayed response to the United States tech slumps - due to yesterday's Victoria Day market holiday - the Toronto Stock Exchange's 300 composite index fell 3.3 percent. 11 of the 14 subindexes ended in negative territory, led by a 6.27 percent plunge in the tech-heavy industrial products sector.
Brazilian shares slump
Brazilian shares fell over 2 percent, echoing a plunge on Wall Street, but traders said the damage was limited by the Brazilian market's sharp fall a day earlier.
"The market was very nervous in the last minutes as (the tech-heavy U.S.) Nasdaq dove sharply. It was pure Nasdaq influence - nothing else," said Gabriel Jafet, a senior trader with Clickinvest brokerage.
The Sao Paulo Stock Exchange's Bovespa index ended 2.22 percent off at 13,587 points, with most of the decline taking place in the final hour of trading. The Nasdaq index slumped nearly 6 percent.
Traders said Monday's fall of about 3 percent, which exceeded by far the declines in the main U.S. indexes that day, helped the Brazilian stocks resist Tuesday's Nasdaq nose-dive.
 Trading volume on the Bovespa of 600 million reals or $325 million was higher than in the past few days of low liquidity and turnover, but well short of April's daily average of 840 million.
Ordinary stock in state-owned oil company Petrobras jumped 6.8 percent to 378 reals after the Senate's Economic Affairs Commission threw out a draft bill that would have blocked the Brazilian government's planned sale of its excess shares in the oil giant.
The government is expected to sell 32 percent of Petrobras' ordinary shares some time later this year. It will retain 51 percent of the company after the sale, which should make trade more liquid and raise a significant sum of money for state coffers.
A fresh bout of portfolio reshaping by big investment funds drove new liquidity champion Telemar, Rio de Janeiro's big regional phone firm, up 1 percent to 32 reals.
Traders said funds were buying Telemar, which is now among the five most active stocks, in anticipation of the expected demise of rival phone company Telesp, whose parent company Telefonica of Spain wants to buy up the remaining shares on the market and de-list the stock.
 Telesp fell 2.6 percent to 41.3 reals.
Internet and pay TV company Globocabo slumped 9.9 percent to 2.1 reals, mainly due to Nasdaq's influence and a "victim of its own high liquidity," as one trader put it.
Minas Gerais' power utility Cemig rose 2.4 percent to 19 reals after the company posted a net profit of 82 million reals or $44 million for the first quarter of this year, nearly three times its profit for all of 1999.
The Bovespa has fallen 12.6 percent so far this month and 20.5 percent since the start of the year.
Elsewhere in South America, the Argentine MerVal index was down 3.70 points to close at 426.12. The Peruvian IGRA index was down 26.43 points to close at 1,452.48. The Chilean IGPA index was down 26.92 points to close at 5,025.37
Bucking the trend, the Venezuelan IBC index was up 385.40 points to close at 6,592.66.
Mexican bolsa down
Mexican stocks ended in the red for the fifth straight session as the Nasdaq tide washed away intraday gains of as much as 2.03 percent.
The IPC index of the 35 most-traded shares fell 62.87 points, or 1.11 percent, to 5593.58 points, its third consecutive six-month low finish. On Nov. 1, the IPC closed at 5479.79.
Share prices have retreated 21.5 percent year-to-date.
Even when bargain hunting kept stocks on positive ground for most of the session, the bolsa could not ignore the tech-heavy Nasdaq index 5.93 percent tumble, by the close.
 "It was all due to the Nasdaq's dive. The bolsa had managed to stay afloat most of the day, but the tight bond between Mexico and the U.S. markets led to this new decline," said one trader from a local brokerage. "We are under the Nasdaq's grip."
Volume on the broad Mexican market rose to 75.97 million shares from Monday's 53.46 million. Of 72 active issues, 32 rose, 29 fell and 11 finished steady. Turnover hit 1.030 billion pesos, or $108.32 million.
The Mexican peso ended firmer for the second straight session as dollar sales by Santander, which needs local currency to meet a first payment for Mexico's Serfin Bank, helped to offset volatility on the local bolsa and on Wall Street, traders said.
The benchmark 48-hour peso contract closed 3.1 centavos firmer at 9.5000/9.5090 per dollar.
Despite the prevailing selling tone in the bolsa, some companies, like Alfa, Hylsamex, Soriana and Grupo Carso, posted technical rebounds after setting year lows during the previous sessions, traders said.
Industrial conglomerate Alfa was among the most-traded shares Tuesday on volume of 3.8 million shares. The company's A stock rose 0.45 peso to 24.75 pesos.
Alfa's steel subsidiary, Hylsamex, bounced 0.34 peso by the close to 15.54 pesos per BCP share.
Retailer Soriana B shares, included among Tuesday's main percentage gainers, rose 0.80 peso, or 2.93 percent, to 27.9 pesos, while Grupo Carso advanced 0.45 peso to 25.65 pesos.
Only two components of the IPC index -- builder Corporacion Geo and Grupo Industrial Saltillo - set year lows Tuesday.
Bellwether Telefonos de Mexico (Telmex), a leader of the Mexican bolsa, ended off 0.95 peso, or 4.22 percent, at 21.55 pesos per L share, and its American depository receipts (ADRs) declined 2-1/8 to 45-3/8 on Wall Street.
Mexico's second biggest broadcaster, TV Azteca, inched up 0.06 peso to 5.02 pesos per CPO share and its ADRs gained 1/8 to 8-1/2.
A TV Azteca source said Tuesday the company's president, Ricardo Salinas Pliego, met in London last week with the chief executive of telecoms giant Vodafone AirTouch PLC.
The source, which asked not to be named, told Reuters that Azteca President Ricardo Salinas Pliego was in Europe last week and met Chris Gent, chief executive of Vodafone, the world's largest mobile telephone company. But the source did not know what the meeting was about.
In March, Azteca said the company was in talks with Spain's Telefonica, as well as other telecommunication firms about possible deals involving the Mexican company's phone and Internet interests.
Toronto stocks plunge
Toronto's main stock index plunged as investors showed skepticism about the valuation of technology stocks and whether higher interest rates will slow the economy.
The Toronto Stock Exchange 300 Index closed down 306.56 points, or 3.3 percent, on volume of 130.8 million shares worth C$3.14 billion. In the overall market, decliners beat advancers 784 to 357 with another 237 issues flat. The TSE suffered its biggest one-day loss in nearly six weeks and closed below 9000 for the first time in a month. The index is now up 573 points for the year.
"There's uncertainty with the impact of higher interest rates as to whether it will slow the economy down, and I feel that it won't, and thus we'll have even higher interest rates," said John Ing, president of Maison Placements Canada.
 "Then there's the uncertainty with respect to technology stocks - the valuations went sky-high and now it probably has to swing the other way," Ing said.
The TSE, which was closed for Victoria Day Monday, also played catch-up with U.S. markets Tuesday, he added. U.S. stock markets fell on Monday.
The blue chip S&P/TSE 60 index lost 19.52 points, or 3.49 percent, to end at 540.42. The Canadian Venture Exchange index dropped 94.69 points to close at 3315.62.
Overall in Toronto, 11 of the TSE 300's 14 subindexes finished in negative territory, led by a 6.27-percent plunge in industrial products, home to most technology stocks.
In that sector, Nortel Networks Corp. fell C$5.90 to C$75.50. Earlier Tuesday, Nortel said that it will bolster its position in the high-growth area of the all-optical Internet network market by buying the rest of an Australian optical component company.
Nortel said it will purchase the two-thirds of Sydney-based Photonic Technologies it does not already own for $35.5 million.
Elsewhere in the industrial products sector, Sierra Wireless dropped C$6.95 to C$47.55, Ballard Power Systems lost C$6.60 to end at C$95.40. Also Research in Motion declined C$6.20 to C$44.75 and Celestica Inc. was off C$6.15 at C$58.10.
 Other losses included a 3.91-percent decline in consumer products, a 2.47-percent drop in utilities, and a 2.29-percent fall in metals and minerals. Oil and gas was down 2.25 percent.
In that sector, Alberta Energy was C$2.00 lower at C$59.25, Talisman Energy was off C$1.40 at C$51.75 and Canadian Natural Resources was down C$1.75 at C$46.70.
Among the gainers, gold issues advanced 2.54 percent, pipelines gained 1.7 percent and merchandising rose 0.49 percent.
"Gold is a safe haven and there's expectation that with the bloated trade deficit in the U.S., the U.S. dollar is vulnerable," Ing said.
In the gold group, Barrick Gold climbed C$1.10 to C$27.20, while Placer Dome shares rose 45 Canadian cents to C$13.15. 
-- compiled from staff and wire reports
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