By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — Brazilian stocks fell Wednesday, with the benchmark pulling back from its best level in more than four months on dampened expectations for the outcome of an upcoming summit to address Europe’s debt troubles.
Brazil’s Ibovespa /zigman2/quotes/210597947/delayed BR:BVSP -2.06% fell 1.4% to 58,662.83 in broad-based losses. Market heavyweight and miner Vale /zigman2/quotes/204339679/composite VALE -4.40% fell 3.6% and Brasil Telecom led decliners, down 6.8% as the shares posted their first loss in six sessions.
Germany pessimistic about summit
Only a second day into the anticipated euro zone summit, Germany is saying that it has given up hope of persuading all 27 nations to rally behind its Franco-German proposal to stem the debt crisis. Photo: Getty
Shares of oil producer Petrobras /zigman2/quotes/200745132/composite PBR -9.19% /zigman2/quotes/201811671/delayed BR:PETR4 -6.26% gave up earlier gains and slipped 0.1%. Meanwhile, shares of Gol Linhas Aereas /zigman2/quotes/206391664/composite GOL -8.52% led advancers in the Ibovespa, closing up 3.6%. They jumped as much as 9% after Delta Air Lines /zigman2/quotes/200327741/composite DAL -3.14% said it has agreed to buy a minority stake in the carrier for $100 million.
Brazilian stocks on Tuesday fought off losses that had followed a soft report on third-quarter gross domestic product. Growth was flat from the second quarter as domestic demand contracted, as did activity in the industrial and services sectors. The economy expanded 2.1% from the year-ago period, below the estimated rate of 2.7% produced by a Dow Jones Newswires’s poll of analysts.
Investors logged profit Wednesday after the Bovespa’s nearly 3% advance in the previous two sessions. Optimism about Europe’s ability to fix its debt crisis was curbed Wednesday after an unnamed German official reportedly rejected the suggestion that the region’s bailout fund would be expanded. Europe serves as a key export market for many Brazilian companies.
The news followed a Financial Times report Tuesday that officials were considering running two funds alongside each other. Read about declines in European stocks on Wednesday.
The dampened optimism comes ahead of summit for European Union leaders late Thursday and Friday in Brussels.
The “signals coming from European officials are anything but encouraging,” as the start of the summit approaches, said Marc Chandler, global head of currency strategy at Brown Brothers Harriman, to clients Wednesday. “We did not expect the kind of closure than many investors want to emerge from this meeting. We did expect some important steps toward erecting the scaffolding to facilitate great fiscal union.”
On Wall Street, stocks shook of losses to end moderately higher. The S&P 500 Index /zigman2/quotes/210599714/realtime SPX -1.72% rose 0.2% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.62% rose 46 points.
Mexico’s IPC /zigman2/quotes/210597945/delayed MX:IPC -2.01% also seesawed during the session, ending down 17 points at 37,054. Argentina’s Merval lost 2.2%.
In Chile, the IPSA /zigman2/quotes/211756426/delayed CL:SPIPSA -1.81% rose 1.6% to 4,156.10, its best close in a week. Stock in Banco Santander Chile /zigman2/quotes/203343410/delayed CL:BSANTANDER -1.97% /zigman2/quotes/202859081/composite SAN -3.97% gained 5.7% after a trading halt was lifted. Banco Santander of Spain raised $950 million from Wednesday’s sale of its 7.8% stake in the unit.
Chile’s INE statistics agency said consumer prices in November rose 0.3% from October, in part as food prices climbed. Analysts polled by Dow Jones Newswires had expected consumer prices to rise 0.1%. The consumer price index rose 3.9% from a year ago.
Rodrigo Vergara was named to a five-year term as the head of Banco Central de Chile. The Harvard-trained economist will succeed José De Gregorio. The government is expected soon to name Vergara’s replacement on the central bank’s board.