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Brazil shares retreat as investors skim profits

SAO PAULO: Brazilian stocks dipped another 0.8 percent on Friday in thin trade, posting losses for the fourth consecutive day which traders again attributed to profit-taking after a recent rally which culminated Monday.

Globocabo cable television firm was the day's bright spot, traders said, but could not give other reasons but a speculative bet on its future in the Internet business. The stock rose 7.4 percent, closing at 3.5 reais.

The Sao Paulo Stock Exchange's leading share index Bovespa finished 0.8 percent lower at 17,034 points. Trading volume was low at 672 million reais, which compares to December daily average of over 900 million.

"Liquidity was low and profit-taking continued," said Tomas Taterka, equities director at Banco Cidade. "We don't have a big flow of capital now and there will be no rise before fresh money hits the market. We may even see further slipping."

A senior trader with Banco Industrial and Comercial said a new fall in New York-traded shares, which were off 0.8 percent in the evening, had triggered profit-taking in Brazil.

"The market needed a price correction rather badly after the recent rally. People were looking for a reason and Wall Street is one," said the trader.

Following the four-day drop, the Bovespa erased its January gains and was down 0.3 percent. Last year, it gained 152 percent in local currency terms.

Investors continued to skim profits on Brazil's biggest private bank Bradesco, which had risen 20 percent recently. Competition fears following an announcement by Spain's BSCH bank that it would buy Brazil's Meridional financial group, helped Bradesco's 0.7-percent fall to 14.90 reais.

"This one has a huge profit-taking potential," said Taterka.

However, second-biggest private bank Itau, which had been on the slide along with its rival Bradesco this week, rose 2 percent to 150 reais.

Bradesco's 20-percent recent gains came after it and Unibanco UBBR4.SA announced they would offer free Internet access to their clients.

Benchmark Telebras receipts fell 0.8 percent to 240 reais as investors were prudent about the paper, which now groups 12 telecoms shares, ahead of Monday's launch on the Bovespa of the so-called new Telebras receipts.

Those would exclude two firms linked to Spain's Telefonica, which last week announced plans to buy out its Brazilian units, Telesp and Tele Sudeste Celular.

Telesp was down 0.8 percent to 51.70 reais and Tele Sudeste slumped 1.4 percent to 17.20 reais.

Some traders fear Telebras receipts would become illiquid.-Reuters