(Updates with Brazil's Bovespa closing little changed as
Petrobras, Copel erased gains)
RIO DE JANEIRO, June 24 Brazil's benchmark
Bovespa index erased most of its gains on Tuesday as concern
about government meddling in state-run companies knocked down
shares of oil company Petrobras and power utility Copel.
Shares of the oil company, formally known as Petroleo
Brasileiro SA, had risen more than 2 percent during
the session as foreign investors snapped up Brazilian shares
following two days of declines.
Investors were particularly keen on shares of state-run
companies, which they said they believe can benefit the most if
President Dilma Rousseff loses her re-election bid in October.
Although she remains a favorite to win, opinion polls have shown
she has been losing popularity among voters.
But Petrobras shares quickly tumbled, closing down 3.6
percent, after the government announced it was assigning to the
company additional production rights to four oil fields off the
country's southeast coast.
Analysts say Petrobras is unable to take on more projects
given its already thinly stretched financial situation. They
fear the government is forcing it into additional exploration
fields to generate more revenue for public coffers.
Similarly, shares of Copel initially gained more
than 3 percent after regulators allowed the company, which is
controlled by the state of Paraná, to increase its energy rates
by 35 percent on average.
The shares closed 0.2 percent lower, however, after the
company's board suspended the increase because of objections
from Paraná's governor, Beto Richa.
Brazil's Bovespa index, which had gained more than 1
percent during the session, closed only 0.1 percent higher.
Other Latin American bourses rose slightly as the major Wall
Street stock indexes hit records, before ending down for the
In currency markets, the Brazilian real and
the Mexican peso lost 0.4 and 0.3 percent, respectively,
as the U.S. dollar gained broadly on the back of
stronger-than-expected U.S. housing and consumer confidence
data, which increased expectations of a more hawkish Federal
(Reporting by Walter Brandimarte in Rio de Janeiro and Priscila
Jordão in São Paulo; Editing by Steve Orlofsky)