Latam bourses take a hit
|
|
January 12, 1999: 4:34 p.m. ET
"Samba effect" brings Brazilian market woes across South American borders
|
NEW YORK (CNNfn) - Brazilian shares tumbled Tuesday, dropping 7.6 percent by the close as concerns over Minas Gerais state's debt moratorium sparked dollar flight and pushed shares close to the circuit-breaker cut-off in the afternoon session, traders said.
Sao Paulo's key Bovespa index fell 487 points to close the day at 5,916. Trade on the Bovespa is halted if the index falls 10 percent before the last half hour of the session.
"Stocks are down on continued strong dollar outflows," a trader at Opportunity brokerage in Rio de Janeiro said.
He said that Minas Gerais' decision to halt payments on its debt to the central government has made international debt markets skittish, forcing companies to pay off maturing foreign issues instead of rolling them over.
"Nobody seems to be doing anything about this situation," he said.
More than $1 billion has fled Brazil through foreign exchange markets this month.
The Venezuelan stock market fared only marginally better. Caracas stocks plunged 6.6 percent Tuesday, as the latest setback to Brazilian reforms sent shock waves through the region's financial markets, traders said.
The IBC fell 306 points to close at 4,349 points with 10 stocks stable, six falling, and only four rising.
"All Latin American markets were dragged down by the 'Samba effect', and the Caracas market was no exception," said Hector Perez of Inverunion.
The Mexican bourse also suffered heavy losses. The benchmark IGPA shed 132.56 points, or 3.69 percent, to close the day at 3,459.640.
-from staff and wire reports
|
|
|
|
|
|