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Brazil stocks end bit firmer encouraged by Wall St

SAO PAUL: Brazilian stocks ended a volatile session slightly firmer on Tuesday as a rally on Wall Street soothed investors worried about the outcome of an important interest rate meeting at home, traders said.

The Sao Paulo Stock Exchange's leading share index Bovespa finished 0.6 percent firmer at 17,921 points in moderate turnover of 979 million reais ($551 million).

"There are a number of things happening," said Roberto Dotta Filho, fund manager at Tudor Asset Management. "Futures are expiring tomorrow and the Copom is likely to come up with a conservative stance. But at the end of the day, an afternoon rally on Wall Street helped the local market end on a positive note."

In New York, the Dow Jones industrial average rose almost 200 points before the Sao Paulo bourse closed, boosted by oil and technology stocks.

In Brazil, the surge in oil prices helped state oil giant Petrobras jump 3 percent to 428 reais.

Petrobras was among a small basket of stocks that posted big gains Tuesday as most investors retreated to the sidelines ahead of a decision by the Central Bank's policymakers committee (Copom) Wednesday.

Copom began its two-day discussion on interest rates Tuesday and economists widely expect the monetary authority to hold interest rates unchanged due to unstable international factors, like rising oil prices.

Stock traders were previously betting on a reduction in interest rates, which could lower borrowing costs for major Brazilian companies and make return on equities more attractive compared to fixed-income funds.

Among Tuesday's advancers were Brazil's second largest private bank, Banco Itau, which reported its best results ever in 1999, prospering from the country's steep currency devaluation. Itau was up 2.6 percent at 136 reais.

On the other hand, Brazil's second-ranking supermarket chain Pao de Acucar, or Cia Brasileira de Distribuicao fell 5.9 percent to 55.5 reais on sharply lower earnings. The company posted a net profit of 62 million reais ($35 million) -- a 60 percent slide from the previous year.

By Tuesday's close, the Bovespa was up 9.4 percent on the month, or 2.9 percent so far this year. -Reuters