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Fraga powers Bovespa, real
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March 4, 1999: 4:50 p.m. ET
Brazil stocks, currency rise 3.9% on Cenbank prez's comments; others gain
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NEW YORK (CNNfn) - An upward trend in equities markets swept through most of Latin America Thursday, with the greatest gains garnered in the region's economic powerhouse, Brazil.
Among the key factors buoying Latin stocks was optimism over monetary-policy comments by Brazil's new Central Bank President Arminio Fraga, which helped to momentarily alleviate some concerns over Brazil's fiscal crisis, and a powerful performance on Wall Street.
Brazilian shares enjoyed a strong surge Thursday, with gains pared only temporarily by a strengthening real.
The Bovespa index surged 353 points, or 3.86 percent, to close at 9,508.
Shortly after Fraga announced a hike in the benchmark interest rate, the Selic, to 45 percent from 39 percent effective Friday, the real began to strengthen on dollar inflows, traders said. The Selic serves as a benchmark for the government's public debt issues.
By the end of trade, the real closed up 3.9 percent at 2.07 against the dollar.
Traders said the interest rate announcements were ultimately positive for stocks.
"The market had been afraid of a shock 70- percent interest rate, but 45 percent was already factored in," one trader said. "It's a first step. Now we'll be watching the performance of the dollar and the performance of the government."
Mexican stocks leapt ahead as well in response to diminishing jitters over Brazil and strength on the Dow, dealers said.
Mexico's leading IPC share index advanced 90.64 points, or 2.20 percent, to finish trade at 4,186.
The bolsa in Venezuela was the only major bolsa in the region to post losses. The IBC index fell 6.17, or 0.17 percent, to 3,730.07.
Trade was sluggish, with few investors still active in a market dogged by the lack of policy initiatives from President Hugo Chavez's new government, traders said.
"There is nothing to suggest that the stock market is going to go up. There is still no clarity over how the government intends to handle the serious economic condition of the country," said Gonzalez Alonso, a broker with Activalores.
Elsewhere in Latin America, bolsas were aided in part by strong equity performances in New York and Sao Paulo. Stocks in Argentina enjoyed the most impressive gain. The Merval index leapt 2.41 percent to 383.83. Shares on the General Index in Peru climbed 0.9 percent to 1,428.0.
Meanwhile, in Chile, stocks climbed 1.11 percent to 3,886.16, and in Colombia, the main share index jumped just over 1 percent to 915.60. 
-- from staff and wire reports
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