Brazil stocks, currency strengthen after surplus
Brazil stocks and currency strengthened on Friday, helped by data showing the government beat its nine-month budget surplus goal a month early.
An uptick on Wall Street also gave stocks a boost as the Sao Paulo Stock Exchange's benchmark Bovespa index rose 0.6 percent to 23,080 points around midday.
Brazil's currency, the real, was 0.3 percent stronger at 2.872 reais per U.S. dollar, reversing course after a weak open.
"The surplus numbers were a very positive surprise," said Miriam Tavares, head of foreign exchange trading at AGK brokerage.
Brazil announced its primary budget surplus reached 10.9 billion reais in August, propelling the cumulative surplus in the year to 63.73 billion reais, above the 56.9 billion reais goal for the first nine months of the year.
The fiscal goal is part of a $40 billion loan deal with the International Monetary Fund.But traders said the market was cautious about high oil prices in the international market, which could dent the global economy and drag on Brazil's vigorous rebound from a recession last year.
"The stock market is cautious," said Marcelo Gallego, head equity trader at Concordia brokerage. "We're still tied to oil."High oil prices could also pressure inflation in Brazil. This could force the central bank to raise interest rates to contain price hikes, further slowing the economy.
High oil prices did help boost the stock of state energy company Petrobras, which was up 1.46 percent at 92.31 reais on expectations it may soon increase its gasoline and diesel prices.
Market bellwether Tele Norte Leste Participacoes was 1.21 percent higher at 39.47 reais.
(From Reuters, September 24, 2004)
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