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Dow delights Latam bolsas
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November 23, 1998: 4:55 p.m. ET
Mexican stocks surge 3.4%, Bovespa, up 1.2%, but Caracas falls off gain train
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NEW YORK (CNNfn) - Wall Street's record-setting run Monday won the day in Latin America, with most bolsas posting solid gains, if not impressive rallies.
Of the region's major bolsas, Mexican stocks gave the best performance, rising 3.4 percent. Brazilian investors took the benchmark Bovespa index 1.2 percent higher on the back of the Dow and performances by small cellular telephone companies. And in Venezuela, the key IBC index fell 2.3 percent as hopes for a successful opposition alliance to face down the presidential front-runner were dashed.
Elsewhere, bolsas enjoyed gains of between 0.4 percent to nearly 5 percent.
Bovespa shrugs off resignations
Brazilian shares tracked gains made on Wall Street on Monday, climbing 1.2 percent even as three top officials resigned amid allegations they tried to influence the privatization of telephone giant Telebras, traders said.
"The market accompanied movements in the rest of the world," a trader at a BancoCidade said. "It really didn't seem to feel the departures from the government."
Sao Paulo's key Bovespa index ended up 104 points, or 1.22 percent, at 8,636 points. Cellular telephone companies led the market's rise with gains of up to 21.8 percent.
The market shrugged off the resignation of Communications Minister Luiz Carlos Mendonca de Barros and two other officials after taped phone conversations appeared to show them trying to influence the $19 billion Telebras privatization.
Blue chips traded mixed, with Telebras preferred receipts rising 0.9 percent to 111.5 reais and Cia Vale do Rio Doce preferred ending off 1.05 percent.
But it was small cellular phone companies that really stood out. Tele Celular Sul preferred surged 21.8 percent to close at 2.4 reais, while Tele Norte Celular preferred closed up 22.6 percent at 38 centavos.
The smaller telephone companies had been left behind during the market's recent gains, making them good buys, traders said.
"Someone must have realized that the other teles already rose a lot," said Marcelo Mollica, an analyst at Banco Icatu.
Telesp Participacoes preferred, for example, closed down 0.3 percent at 34.4 reais.
Shares worth 506.4 million reais traded hands.
Mexico runs with the Dow
Mexican stocks rallied with a passion as optimism spilled over from record levels on Wall Street, traders said.
The leading IPC share index closed up 135.86 points, or 3.4 percent, at 4,131.480.
"In Mexico's case, I don't think it's anything other than correlation with the Dow Jones," said Sergio Garcia, head of research at the Value brokerage.
Earlier in the day, local shares also ran to catch up with advances made by their American depositary receipts on Friday when the bolsa was closed in observance of a national holiday, traders said.
Disappointment consumes Caracas
Caracas stocks ended down by 2.3 percent, bucking gains in New York and in neighboring bolsas, as attempts to find a consensus presidential candidate to challenge Hugo Chavez unraveled, traders said.
The benchmark IBC index fell 91.06 points to 3,858 on investors' election concerns.
Chavez, the front-runner for the Dec. 6 presidential vote, has scared many investors with promises to dissolve Congress, redraft the constitution and bring state-owned Petroleos de Venezuela under closer government control.
Monday's loss put an end to a four-session run of gains last week, which were driven in great part by optimism that an anti-Chavez alliance could be brokered.
Elsewhere in the region
Most of Latin America's other bolsas posted significant gains.
In Peru, stocks rose 70.95 points, or 4.70 percent, to close at 1,579.27.
Chilean stocks moved up 15.75 points, or 0.40 percent, to 3,923.34.
And in Argentina, the benchmark Merval index rose 2.13 points, or 0.42 percent, to 504.07.
-- from staff and wire reports
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