28.9 C
New York
Monday, July 4, 2022

Quarterly results, police operation hit Brazilian equities

Quarterly results, police operation hit Brazilian equitiesSAO PAULO: Brazil’s benchmark Bovespa equities index tumbled over 1.5 percent on Tuesday, as poor quarterly results in the financial services and retail sectors and a federal police price-fixing probe hit shares of companies including Ultrapar and Cosan.

Among the firms that reported disappointing second quarter results on Monday evening were Cielo SA, Brazil’s largest credit card processor, Itau Unibanco Holding SA , the country’s top private lender, and RD, the nation’s No. 1 over-the-counter drug retailer.

All three were down at least 2 percent at one point in morning trade after missing profit estimates. Cielo was the Bovespa’s biggest loser, falling over 8 percent, its biggest

intraday drop since 2016, after increased competition hit margins.

Fuel companies Ultrapar Participacoes SA, Cosan SA, and Petroleo Brasileiro SA, as well as recently floated distribution unit Petrobras Distribuidora SA , also fell sharply after police in the southern state of Parana said they were investigating a wide-ranging gas price fixing scheme.

Those seven firms accounted for over half of the Bovespa’s losses on Tuesday.

Adding to the sell-off, traders said they were taking profits, especially in banking stocks, after the Bovespa climbed over 10 percent so far in July.

“The rise this month also opened space for realizing some profits, especially with banks, which rose more than double digits,” said Vitor Suzaki, an analyst at Sao Paulo-based Lerosa Investimentos.

Across Latin America, currencies posted moderate losses on Tuesday in the lead-up to a Federal Reserve interest rate decision on Wednesday. The Fed is expected to keep rates unchanged, but solid US economic growth combined with rising inflation are likely to keep it on track for another two hikes this year.

Copyright Reuters, 2018

Source: Brecorder

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles