Brazil's stock market fell in volatile trading on Friday as a higher-than-expected inflation reading trimmed expectations of lower US interest rates and risk aversion increased. The Bovespa index of the Sao Paulo Stock Exchange shed 0.66 percent to 62,444.97 points, after tumbling 2.9 percent in the previous session.
In the stock market, shares of state-controlled oil company Petrobras, the heaviest-weighted stock in the Bovespa index, fell 1.34 percent to 81.2 reais, adding to a 3.2 percent slump the previous session, as oil prices dropped.
Banco do Brasil jumped 6.42 percent to 31.5 reais after two of its biggest shareholders sold part of their stake in the bank and raised 3.06 billion reais in a secondary offering. Previ, the pension fund for Banco do Brasil employees, and BNDESpar, a unit of development bank BNDES, sold 104.66 million shares at a price of 29.25 reais each.
Sugar and ethanol producer Cosan shed 2.8 percent to close at 20.80 reais. The company late on Thursday posted a profit of $17.7 million reais in the third quarter, down sharply from the year-ago period.
Retailer CBD rose 1.8 percent to 34.5 reais. Chief Financial Officer Eneas Pestana said on Friday the company plans to reduce operating expenses to around 20 percent of net sales in 2008 from over 21 percent now, as part of a restructuring plan aimed at improving the retailer's results.
In the foreign exchange market, the Brazilian real eased 0.84 percent to 1.797 per dollar after a central bank auction to buy the greenback on the spot market and as inflation concerns in the United States weighed on markets.
US consumer prices rose 0.8 percent in November, higher than the 0.6 percent analysts expected, which scaled back expectations that the Federal Reserve would trim interest rates in the coming months in a market already nervous over global credit unrest. "People are closing their positions because they know credit is going to be tight," said Reginaldo Galhardo, foreign exchange desk manager at Treviso brokerage.