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Brazil stocks end lower eyeing volatile Wall St

SAO PAULO: Brazilian shares finished lower in limited trade Tuesday as investors eyed a volatile Wall Street and remained undecided on what new issues to buy after stock options expired Monday, traders said.

The Sao Paulo Stock Exchange's leading Bovespa share index ended down 1.2 percent at 17,489 points on low turnover of 820 million reais ($456 million).

"The market, which lacked liquidity today, was hit by falls on Wall Street," said Roberto Dotta Filho, fund manager at Tudor Asset Management in Sao Paulo. "There are a lot of shares out there that have a lot of room to rise, but investors haven't yet made up their minds on what to buy after options expired yesterday."

Traders said volatility on Wall Street on Tuesday, one day after US investors returned from a long weekend, frightened Brazilian investors, as it reminded them of Friday's big US equity drop, which depressed local shares.

Both the Dow Jones industrial average and the Nasdaq composite index were down in late afternoon trade before the Brazilian market closed. The Dow later started inching upward into positive territory and closed 85 points higher at around 10305.

Some second-tier stocks, which have become favourite picks in recent weeks dropped on Tuesday, dragging down the rest of the market, traders said.

Pay TV operator Globocabo was one of them, losing 3.3 percent to 4.1 reais. Traders expected investors to start buying Globocabo's stocks and options, betting the issue would eventually replace Telebras receipts as the market benchmark.

Telebras preferred receipt fell 1.4 percent to 250 reais.

Regional aircraft maker Embraer fell 3.6 percent to 8 reais, despite an announcement it received an order for 100 short-haul aircraft from Continental Express, a unit of Continental Airlines Inc. The order brought the airline's Embraer jet orders to 200, or an equivalent of $3.4 billion.

Oil giant Petrobras ended nearly flat at 442 reais. The government's privatisation council approved a share sale programme for 32 percent of its voting stock, worth almost 8 billion reais ($4.5 billion) at market prices. The government -- which will retain control of Petrobras with 51 percent of voting capital -- plans to complete the sale by July.

Federally owned bank Banespa finished 1.2 percent lower after a court in Brasilia granted an injunction blocking its privatisation in May.

The market's Bovespa index is up 7 percent so far this month and up 2 percent so far in 2000.-Reuters