Brazilian Real Weakens, Shares Decline, as Political Turmoil Continues
14 October 2015 - 9:01AM
Dow Jones News
By Jeffrey T. Lewis
SAO PAULO--The Brazilian real weakened against the dollar on
Tuesday and shares fell, as the country's turbulent political
situation got even more complicated.
The Ibovespa stock index fell 4% to 47362 points, its biggest
drop so far this year. The real exited active trading at 3.8744 to
the dollar, according to Tullett Prebon via FactSet, after closing
at 3.7540 on Friday. Monday was a holiday in Brazil and financial
markets were closed.
The struggle between Brazilian President Dilma Rousseff and the
country's Congress reached a new level on Tuesday. The country's
Supreme Court ruled against a reported attempt by the head of the
lower house of the legislature to ease the path to impeaching Ms.
Rousseff.
The lower house leader, Eduardo Cunha, on Tuesday was also the
subject of an ethics complaint, which seeks to remove him from
office amid allegations that he received money from a graft ring
linked to the state-controlled oil company Petroleo Brasileiro SA
currently under investigation by Brazilian authorities. Mr. Cunha
denies the allegations.
Petrobras, as the state oil company is known, was among the
biggest decliners in the Ibovespa on Tuesday, giving up 7.6% to
close at 8.13 reais.
Disappointing trade data out of China, Brazil's biggest trade
partner, also weighed on stocks. Shares of Companhia Siderurgica
Nacional, which exports steel and iron ore, fell 12.6% to 4.66
reais and iron miner Vale SA declined 7.9% to 14.98 reais.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 13, 2015 17:46 ET (21:46 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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