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Brazil stocks end up on Wall St, strong currency

SAO PAULO: Brazilian stocks ended Friday's pre-Carnival trading on an upbeat note, buoyed by strong gains on Wall Street, a firm local currency and stable inflation, traders said.

The Sao Paulo Stock Exchange's leading share index Bovespa finished 3.4 percent higher at 18,632 points, just below the record high of 18,685 set on Feb. 8.

"The market's outlook is simply bright," said Carlos Hokama, fund manager at Credibanco.

Investors cheered a rally on Wall Street, where the Dow Jones industrial average rose more than 200 points and the Nasdaq Composite Index hit a new record high.

Telecom issues, the market's traditional blue chips, led the bulls in Brazil, with cellular carrier Tele Centro Oeste soaring 21 percent to 7 reais in healthy volume.

Traders said rumours were swirling in the market about a possible revamping of the firm's ownership. Company officials were not available for comment.

The loser in telecoms sector was coastal telephone operator Telemar after it announced a smaller consolidated net profit in 1999 than a year ago.

Telemar, or Tele Norte Leste, reported its net profit fell 46 percent to 95.7 million reais, sending its stock down 0.7 percent to 241 reais.

The market was also boosted by a firm real currency, which finished trading at its strongest level since June 1999. A steady stream of dollar inflows from recent bond issues and direct investment by foreign firms boosted the real.

Stable inflation data unveiled in the morning also supported the bullish sentiment. The University of Sao Paulo's Economic research institute (Fipe) said consumer prices in Brazil's industrial hub of Sao Paulo eased 0.2 percent in February, marking the first deflation in a full month since June.

Turnover in the market was a modest 740 million reais ($423 million), as activity petered out ahead of the Carnival holiday. The market is closed Monday, Tuesday and a half-day Wednesday.

The Bovespa is up 9 percent so far this year and 5.5 percent so far in March.-Reuters