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Brazil shares end up, Petrobras shines

SAO PAULO: Brazilian stocks rose 1.5 percent in thin trade and closed at record highs on Monday amid hopes OPEC oil exporters will agree to boost supply and trim oil prices, allowing a rate cut in Brazil, traders said.

Oil giant Petrobras led the market, rising after Spanish-Argentine oil group Repsol-YPF said it agreed to criteria of a long-planned swap of assets with Petrobras in South America.

The Sao Paulo Stock Exchange's leading share index Bovespa closed 1.5 percent up at 18,951 points, its new historic high level. Trade was thin, however, at 555 million reais, which compares to Friday's heavy 1.5 billion reais.

"Petrobras did most of the work today. We also had some profit-taking in telecommunications firms, which normally adds strength to issues like Petrobras," said Evandro dos Reis of Indusval brokerage.

Carlos Hokama, chief of equities at Credibanco Carlos Hokama said: "The market has been eyeing OPEC today because there is a sort of a consensus here that lower oil prices will open the way for an interest-rate cut. Nothing came out of OPEC today, but hopes are generally positive."

Last week, the Central Bank left the key Selic rate unchanged at 19 percent, citing worries about world oil prices, but adopting a bias to ease rates before its next monthly meeting on rates. The market believed a rate cut could now happen after a widely-expected OPEC agreement.

OPEC's full ministerial meeting, which is trying to find a formula on increased supplies that will lower oil prices, was scheduled to reconvene on Tuesday.

Globocabo pay TV and Internet operator, one of the most traded and speculative issues in the market, continued its fall on Monday, sliding 5.1 percent to 3.14 reais. It had risen a lot early this year on its Internet prospects.

Despite some profit-taking in telecommunications firms, Telemar rose 5.1 percent to 48.9 reais, which traders attributed to a speculation rather than fundamental reasons.

Traders said the general mood in the market was optimistic as Brazil continued showing good economic performance this year, particularly after last week's announcement of a high budget surplus in January.-Reuters