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Brazil stocks

extend gains

SAO PAULO: Brazil stocks extended gains to end up 2.73 percent in heavy trade boosted by short-covering and highs in Wall Street, traders said on Thursday.

The Bovespa index of the 54 most active shares closed up 1,070 points at 39,398. Turnover rose 57.7 percent to 341.8 million reais ($365.6 million).

Brokers noted trading was marked by volatility ahead of the upcoming futures index and options settlements.

Players perceived to be holding short positions rushed to the market to cover their positions as the market rose sharply in afternoon trade, they added.

Wall Street's recovery also added to the market's rally, analysts said.

Benchmark state telecom Telebras preferred, which is the underlying stock for the most traded options, accounted for 51 percent of the total trade, analysts noted.

Telebras preferred closed at 35.30 reais, up 2.74 percent.

Traders also noted that Souza Cruz options were heavily traded.

In addition to speculative buying, analysts were positive on the possibility of small and medium investors re-directing money to stocks after the government recently adopted measures to increase the maturity period of Brazilian investment funds.

Under new government rules, most investment funds will not be allowed to pay overnight yields and will have to hold a minimum 30-day maturity period.-Reuter