You are here

Brazil: Stocks take new plunge on virus fears

nz_brazilstock_120331.jpg
Brazilian stocks plunged on Wednesday on fears about the economic impact of the coronavirus pandemic, leading the Sao Paulo stock exchange to suspend trading for the second time this week.

[SAO PAULO] Brazilian stocks plunged on Wednesday on fears about the economic impact of the coronavirus pandemic, leading the Sao Paulo stock exchange to suspend trading for the second time this week.

The Ibovespa index closed down 7.64 per cent, after earlier dropping 10.1 per cent, which triggered automatic circuit breakers that interrupt trading for 30 minutes in such cases.

That came two days after a "Black Monday" crash led to the same measure. That day, the index closed 12.7 per cent down, its worst day since 1998.

Oil and airline stocks were again hit especially hard, as the virus disrupted both industries.

Shares in state-run oil company Petrobras closed down more than 10 per cent, after losing 30 per cent Monday.

Airlines Azul and Gol both closed down nearly 15 per cent.

The Ibovespa index was down more than 12 per cent shortly after the temporary closure, but regained some ground in afternoon trading.

The index had regained 7.14 per cent Tuesday, but the latest losses erased that and then some.

The Brazilian real, which has been pummeled by the recent turmoil, fell more than seven per cent, to 4.765 to the dollar.

Brazil, Latin America's largest economy, cut its 2020 economic growth forecast Wednesday to 2.1 per cent over the coronavirus pandemic, saying the fallout would likely shave 0.3 percentage points - and maybe more - off the figure this year.

Some private analysts say the impact could be even worse, lowering their growth forecasts for Brazil to 1.5 per cent or less - bad news for far-right President Jair Bolsonaro just over a year into his term.

Brazil has 52 confirmed cases of the new coronavirus. It has not reported any deaths so far.

But the economy is being hit hard because of Brazil's close ties with China, its largest trading partner and the main destination for its key commodity exports.

AFP