Friday, May 12, 4:45 PM EDT (Thomson Financial): Latin American stocks
tumbled, as the recent surge in oil prices stoked concerns about higher
global inflation and interest rates. Shares were also pressured by
investors' continued move to lock in recent market gains.
Brazil's Bovespa Index dropped 635.10 points, or 1.55%. Mexico's
benchmark Bolsa Index fell 280.37 points, or 1.31%, while Argentina's
Merval Index lost 50.96 points, or 2.74%.
Brazilian stocks sank, as investors continued to take profits amid
growing concerns that the recent surge in oil prices will fuel U.S.
inflation, forcing the U.S. Federal Reserve to continue raising interest
rates. Data released today showed that U.S. import prices leapt a
bigger-than-expected 2.1% in April, driven by an 11.5% surge in the price
of imported petroleum. Also, U.S. Treasury yields rose today, reflecting
expectations for higher interest rates.
In local economic news, inflation as measured by Brazil's General Price
Index (IGP-M) rose 0.21% in the first 10 days of May compared with a drop
of 0.43% in the first 10 days of April.
On the corporate front, Telemar said yesterday that it plans to appoint
Luiz Eduardo Falco as its chief executive effective July 1. He will replace
Ronaldo Iabrudi.
Meanwhile, grocer Companhia Brasileira de Distribuicao (CBD) said its
April same-store sales continued reflect the impact of declining food
prices and caution from consumers. CBD will release its April same-store
sales results Wednesday.
Brazilian steel holding company Arcelor Brasil said its first-quarter
net profit plunged 79% from a year earlier due to sluggish demand and lower
export prices.
Also reporting, technology group Totvs SA posted a first-quarter net
loss of 9.8 million reals, reversing a year-earlier net profit of 5.5
million reals.
Elsewhere, Mexican issues fell for a third consecutive session as
investors continued taking profits amid a sell-off on Wall Street today.
In the news, media group Televisa said it is working with several
private-equity investment firms to prepare a bid for U.S. Spanish-language
broadcaster Univision.
Argentine shares followed regional equities lower amid concerns about
mounting global inflation and higher U.S. interest rates. In local
developments, steelmaker Acindar posted a first-quarter net profit of 222.8
million pesos, up sharply from 152.5 million pesos a year earlier.
-- Paul.Davee@thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Latin American Commentary.
The information herein is believed to be true and accurate, we take no
responsibility for inaccurate information and reserve the right to update
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SOURCE Thomson Financial Corporate Group
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