Brazil's stocks and currency strengthen early

Brazil's stocks and currency strengthened early Wednesday as traders bet George W. Bush will clearly win what some analysts believe could become a disputed presidential election.

The Bovespa index of the Sao Paulo stock exchange rose 1.53 percent to 23,624 points on the heels of soaring stock futures in New York.

The local currency, the real , strengthened 0.56 percent to 2.838 reais as Brazil's country risk, or the interest rate surcharge that must be paid to borrow on international capital markets, fell by 0.05 percentage points to 4.48 percent.

"I think markets are expressing some relief that there may be a clear winner and that pre-election anxiety will subside," Carlos Cintra, head of the fixed-income desk at Banco Prosper in Rio de Janeiro, said."Domestic inflation expectations also diminished a bit, which is a nice sign."

While forecasts for Brazil's benchmark IPCA consumer price index rose slightly in the central bank's weekly survey of about 100 analysts released on Wednesday, inflation projections for 2005 declined to 6.09 percent from 6.11 percent among the five top-ranked forecasters, the central bank said.The central bank is trying to curb inflation without halting a vigorous economic recovery.

(From Reuters, November 03, 2004)

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