Brazil Stocks Open Higher On Hopes For Plan By France, Germany

Date : 10/21/2011 @ 10:26AM
Source : Dow Jones News
Stock : Cosan Limited Class A (CZZ)
Quote : 7.17  0.0 (0.00%) @ 6:41AM

Brazil Stocks Open Higher On Hopes For Plan By France, Germany

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Brazilian stocks traded robustly higher after the open Friday, bouncing back from steep losses in the previous session as leaders in Germany and France promised a plan to expand the euro-zone's bailout fund by the middle of next week.

Around 9:45 a.m. EDT, the local market's benchmark Ibovespa index of most-traded issues was up 1.4% at 54,771 points.

Expectations for a positive start in U.S. markets gave investors in Sao Paulo reason to bid local shares higher after the opening bell. European markets rose sharply on hopes that French President Nicolas Sarkozy and German Chancellor Angela Merkel will make good by next Wednesday on a pledge to reach an agreement to strengthen the Europe's key rescue fund.

Higher third-quarter net profits reported by U.S. firms such as General Electric, Verizon, Honeywell and McDonald's helped underpin the gains.

Local currency and stock markets have been sucked into the ebb and flow of global risk appetite in recent months since the European debt crisis escalated, with the Brazilian real and company stocks displaying a high degree of day-by-day volatility. The real recently traded stronger at BRL1.7758 to the dollar.

State-controlled energy giant Petroleo Brasileiro SA (PBR, PETR4.BR) shares were up 0.9% at BRL18.99. Petrobras' chief financial officer said late Thursday that the appreciation of the dollar against the Brazilian real since August will have a slight negative impact on the firm's balance sheet. The official declined to give numbers, citing the Nov. 11 release of its quarterly earnings report, but said some 70% of the Petrobras' debt is denominated in dollars.

Shares of Brazil's largest sugar and ethanol group, Cosan SA Industria e Comercio (CZZ, CSAN3.BR) were up 0.1% at BRL26.53, after the company said Friday it bought the distribution assets of Exxon Mobil Corp. (XOM) in Bolivia, Paraguay and Uruguay. Cosan didn't unveil the acquisition's value but said that with the deal, annual sales should increase by 5%.

State-controlled utility Centrais Eletricas Brasileiras, or Eletrobras, (ELET6.BR) shares up 1.4% at BRL23.04. Electrobras said Thursday it plans to go ahead with an offer for a stake in Portugal's electrical utility. Earlier this week Electrobras said it plans to sell up to $2.5 billion in global bonds.

Shares of Vale SA (VALE, VALE5.BR), the world's biggest iron-ore producer, were up 1.6% at BRL37.82, and telecommunications company Tele Norte Leste Participacoes SA (TNE, TNLP4.BR), or Oi, was up 1.6% at BRL18.15.

-By Paul Kiernan, Dow Jones Newswires; (+55)11-3544-7074; paul.kiernan@dowjones.com

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