Brazil Bovespa edges up as OGX plunges on last day in index

31 Oct, 2013

MEXICO CITY: Brazil's benchmark Bovespa stock index edged up on Thursday, the day before heavily weighted oil firm OGX was set to be removed from the index after the company filed for bankruptcy protection. Mexico's IPC index was flat while Chile's bourse was closed for a local holiday.

The Bovespa rose 0.15 percent to 54,256.20 points to end October up nearly 4 percent.

Shares of OGX Petroleo e Gas Participacoes SA dropped 23.53 percent, the day after the company controlled by former billionaire Eike Batista filed for bankruptcy protection.

Brazil exchange operator BM&F Bovespa said late on Wednesday that it would remove OGX from the Bovespa after Thursday's session but that the shares would continue to trade.

OGX's relatively heavy weighting in the index has meant that even small changes in the stock's price cause the Bovespa to swing widely, and its removal should lessen volatility, analysts said.

Shares of state-run oil company Petroleo Brasileiro SA rose 2.41 percent, touching their highest level in nearly six months as investors continued to cheer a new fuel pricing proposal from the company, which could boost profitability.

The company currently imports gasoline to satisfy local demand while selling it at a loss at the government's insistence as a means of controlling inflation.

Shares of steelmaker Gerdau SA rose 4.68 percent after the company reported better-than-expected third-quarter earnings on Thursday. Mexico's IPC index, which ended the month down 2.1 percent, closed flat.

Mexico's Senate on Thursday approved a plan to slap a 1 peso-per-liter tax on sugary drinks and an 8 percent tax on junk food, before sending the bill back to the lower house of Congress for final approval, expected later in the day. Shares of Coca-Cola Femsa, Coke's largest bottler in Latin America, lost 1.28 percent. Bread maker Bimbo , which fell more than 2 percent in morning trading, closed the day up 0.6 percent.

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