Brazil's stock market seesawed near the unchanged mark on Friday as concerns over a slowdown in the US economy increased investors' aversion to risky emerging market securities. The Bovespa index of the Sao Paulo Stock Exchange fell 0.03 percent to 64,609 points. Local markets were closed for a national holiday on Thursday, when equities on Wall Street tumbled.
On the stock market, iron ore miner CVRD fell 2.1 percent to 52 reais as prices of copper hit a three-month low, while prices of other metals also slid on concerns over weak demand in the United States and China.
Aircraft maker Embraer rose 0.28 percent to 21.16 reais as the company forecast a surge in jet deliveries in 2008 and 2009. The company, in a statement to the Sao Paulo stock exchange on Friday, said it sees jet deliveries rising to 205-215 in 2008 from 165-170 this year, growing to 315-350 in 2009 as demand for air travel rises.
State-owned oil company Petrobras, the heaviest weighted stock in the Bovespa index, fell 0.42 percent to 78.80 reais as international crude prices rose more than 1 percent in New York and London. Lingering concerns that a housing slump and its effect in the bond markets could slow the US economy helped drag Brazilian markets lower.
Yield spreads of Brazil's overseas bonds over comparable US Treasuries as measured by J.P. Morgan's EMBI+ index widened, reflecting an increase in investors' risk aversion toward Brazilian assets. The index showed the country's bond spreads widened by 6 points to 208. "We started out under the shadow of yesterday...focusing more on the credit market crisis," said Reginaldo Galhardo, a manager of foreign exchange trading at the Treviso brokerage.
The holiday in Brazil on Thursday helped reduce trading and capital inflows to the country, also contributing to the slide in the real, he said. Interest-rate futures on the BM&F commodities and futures exchange in Sao Paulo firmed, reflecting greater investor caution. Brazil's currency, the real, weakened 0.69 percent to 1.746 per US dollar, after closing on Wednesday at its strongest since March 2000.