Brazil stocks in choppy trade as caution lingers

SAO PAULO, Feb 3 (BestGrowthStock) – Brazilian stocks seesawed in
early trade on Wednesday, as investor caution lingered on
doubts over the global economic recovery and ahead of key data
slated for release later in the week.

The benchmark Bovespa index (.BVSP: ) edged down 0.25 percent
to 66,994.861 near mid-day after dipping in and out of positive
territory.

While private-sector employment data from the United States
signaled an economic recovery could be coalescing, lingering
doubts over a fiscal crisis in Greece offset some optimism,
said Marianna Costa, an economist with Link Investimentos in
Sao Paulo.

“Deep down, the scenario still isn’t really calm,” she
said. The worries over Greece are “a problem that will probably
get worse before improving.”

More indicative of a possible U.S. recovery, she said, will
be U.S. Labor Department jobs numbers, due Friday. The January
non-farm payrolls government report, which is forecast to show
a gain of 5,000 jobs from December, will be closely watched for
broad indications about the health of the U.S. economy.

Brazil’s currency, the real (BRBY: ), weakened 0.6 percent to
1.841 per dollar as the greenback edged up 0.2 percent against
a basket of major currencies (.DXY: ).

Among Brazilian stocks, heavyweights Vale and Petrobras led
losses.

Mining giant Vale (VALE5.SA: ), the world’s largest producer
of iron ore, dropped 0.69 percent to 43.36 reais.

State-controlled energy company Petrobras (PETR4.SA: ) shed
0.73 percent to 33.85 reais as crude oil (CLc1: ) traded flat
ahead of key inventory data.

Shares of Grupo Pao de Acucar (PCAR5.SA: ), Brazil’s largest
retailer, fell 0.84 percent to 64.74 reais after Valor
Economico newspaper reported that regulators are considering
imposing restrictions on the company’s purchase of rivals
Globex Utilidades and Casas Bahia.

The newspaper did not say how it obtained the information
but added the decision would prevent Pao de Acucar from closing
stores and revamping the operations of both Casas and Globex.

Brazilian banks gave up some of their gains of the previous
session. Itau Unibanco (ITUB4.SA: ), the country’s largest
private-sector bank by assets, moved down 0.16 percent to 37.24
reais. Bradesco (BBDC4.SA: ) slid 0.25 percent to 32.27 reais.
Banco do Brasil (BBAS3.SA: ), Latin America’s largest bank by
assets, lost 1.96 percent to 30 reais.

Brazilian oil start-up OGX (OGXP3.SA: ) helped limit losses,
gaining on 3.07 percent to 18.45 reais. The company on
Wednesday estimated recoverable oil reserves from its OGX-3
well at 500 million to 900 million barrels. For details see
[ID:nSAS000050]

Yields on Brazilian interest rate futures contracts
(0#DIJ:: ) inched higher the day before minutes from the central
bank’s most recent meeting are due.

The yield on the contract due January 2011 (DIJF1: ) edged to
10.37 percent from 10.35 percent. The yield on the contract due
January 2012 (DIJF2: ) stayed flat at 11.6 percent.

Both were among the morning’s most active contracts.

Last week policymakers held Brazil’s benchmark interest
rate, the Selic, at a record-low 8.75 percent, but gave
indications that their next steps would depend on the evolving
macroeconomic scenario.

The minutes from that meeting are scheduled for release
Thursday morning, and the document will be scoured by investors
looking for clues about when a tightening cycle could begin.

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(Reporting by Luciana Lopez; Additional reporting by Guillermo
Parra-Bernal; Editing by Padraic Cassidy)

Brazil stocks in choppy trade as caution lingers