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Brazil markets rise as impeachment goes back on track

Brazil markets rise as impeachment goes back on track

BRASILIA: Brazilian stocks and the real jumped on Tuesday with impeachment proceedings against leftist President Dilma Rousseff back on track, fueling optimism that a new pro-market administration could take over on Thursday.

Brazil’s benchmark Bovespa stock index rose 2 percent, driven up by shares of banks and energy companies such as state-run oil producer Petroleo Brasileiro SA.

Brazilian shares outperformed other equity markets in the region and drove the broader MSCI Latin American stock index , also up about 2 percent.

The Brazilian real, in turn, gained more than 1 percent and was stronger than the 3.50/dollar mark that many traders see as a threshold for central bank intervention. The bank has not intervened to curb currency gains through reverse swaps since last Tuesday.

The speaker of the lower house of Brazil’s Congress withdrew early on Tuesday his controversial decision to annul an impeachment vote against Rousseff. The Senate will vote on Wednesday whether to put her on trial for breaking budget laws.

If, as is widely expected, a simple majority agrees to hold the trial, she will be automatically suspended from office for up to six months and Vice President Michel Temer will take over as president.

Elsewhere in Latin America, the Mexican peso also rose more than 1 percent as crude prices jumped 2 percent on supply disruptions in Canada. Other currencies lost against the dollar, with Colombian peso down 0.6 percent.

Copyright Reuters, 2016

Courtesy : BRecorder



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