Brazil stocks fall after rally, Wall St weighs
SAO PAULO, Oct 30 (Reuters) - Brazil's stocks fell on Friday, taking a breather after a sharp rally in the previous session and mirroring losses on Wall Street.
Sao Paulo's Bovespa index .BVSP shed 1.45 percent to 62,794.49 in choppy trade. On Thursday the index rose nearly 6 percent, its biggest one-day percentage gain in nearly six months, after data showed the U.S. economy, the world's largest, grew for the first time in over a year in the third quarter.
The sluggish trade mirrored that in the U.S. market where investors grappled with data offering a mixed picture on the prospects for the economic recovery.
Brazil's currency, the real (BRBY), also weakened 0.69 percent to 1.743 against the dollar.
"The biggest worry for markets today is still on what's going on abroad," said Eduardo Cotrim, Treasury desk director at Banco Modal.
"There is uncertainty as to whether the U.S. Federal Reserve will begin to take some steps towards removing the excess liquidity that it put in the market."
The Fed, along with other major central banks, pumped in billions of dollars into the world economy over the past year as the global financial system grappled with the worst crisis in decades.
More recently, higher-yielding emerging market assets have attracted large amounts of liquidity. An incipient rebound in Brazil helped push the Bovespa index up more than 67 percent this year and the real nearly 34 percent higher.
The government became so worried about what it called "euphoria" that last week it began charging a 2 percent tax on foreign investment into stock and fixed income markets to curb the strengthening of the currency.
At the stock market, commodity shares were the biggest weighted drags as energy and metal prices decreased.
Oil giant Petrobras (PETR4.SA) fell 1.83 percent to 35.41 reais as oil prices eased. Mining company Vale (VALE5.SA) shed 2.07 percent to 40.22 reais.
Steelmakers also fell along with metal prices, with Gerdau (GGBR4.SA), CSN (CSNA3.SA) and Usiminas (USIM5.SA) shedding between 0.25 and 2.7 percent.
Brazil's Embraer (EMBR3.SA), the world's third-largest maker of commercial aircraft slumped 4.40 percent to 9.56 reais after Chief Financial Officer Luiz Carlos Aguiar said the company foresees a 10 percent drop in revenue in 2010. See [ID:nN30406298].
The gloom was such that even TIM Brasil (TCSL3.SA) fell 3.69 percent to 4.44 reais despite its third quarter results. Brazil's third-largest wireless carrier said on Friday it had turned a profit of more than $35 million in the third quarter from a loss in the year earlier period. See [ID:nN30290404]
Interest rate futures <0#DIJ:> were mixed, with the central bank expected to keep interest rates on hold at 8.75 percent until the end of the year and only raise them in 2010. (Reporting by Ana Nicolaci da Costa)
