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Brazil shares end 3.2 pct down on Nasdaq sell-off

SAO PAULO: Brazilian shares closed sharply lower on Monday as a sell-off in the technology-heavy Nasdaq index in the United States continued to erode local confidence, traders said.

The Sao Paulo Stock Exchange's benchmark Bovespa Index ended 3.2 percent lower at 17,245 on modest volume of 600 million reais ($345 million).

"This fall is 100 percent Nasdaq," said fund manager Gabriel Jafet of Oryx Asset Management in Sao Paulo. "There are no local factors today."

The Nasdaq slid 7.6 percent on Monday as investors unloaded technology stocks across the board and fretted about the government's anti-trust suit against Microsoft Corp.

It was the fifth largest drop in the Nasdaq's history in percentage terms and the largest ever in points.

"For the rest of the week, the Bovespa's performance will be strongly linked to what the Nasdaq does," said Jafet.

Just a week after the Bovespa hit record-high levels and tested the 19,000-point level, the index is now in danger of losing 17,000. Jafet said the next support is around 16,200.

The Bovespa is now up a mere 0.9 percent since January 1 and has dropped 7.4 percent in the last month.

Ironically, on Nasdaq's black Monday, one of Brazil's most popular technology stocks, Globocabo, was one of the few winners.

After rising 8.6 percent on Friday, the cable TV and Internet firm tacked on another 4.9 percent to 3.45 reais. Globocabo had been undervalued recently by rumours of a new share subscription price of 2.5 reais per share.

Another big gainer was steel company Usiminas, which rose 7.2 percent to 9.27 reais. Traders said they did not know the reason behind the stock's strength.

The telecommunications and electricity stocks were among the hardest hit by Monday's selling.

Telesp Celular, the country's largest mobile telephone operator, slipped 5.8 percent to 37.20 reais, while the biggest fixed-line company Telesp dropped 4.3 percent to 49 reais.

Telebras receipts , a basket of telecommunications shares, fell back 5.19 percent to 246.50 reais and accounted for 25 percent of volume.

Cesp , the Sao Paulo electric utility, ended 6.5 percent lower at 11.02 reais, while the Minas Gerais group Cemig dropped 6 percent to 20.50 reais. -Reuters