MercoPress. South Atlantic News Agency

Latinamerican markets collapse; Brazil down the most

On the eve of the crucial vote in the US House of Representatives, Latinamerican markets tumbled Thursday dragged by Wall Street (down 3.22%), with Brazil's Bovespa and Argentina's Merval suffering the largest losses.

Sao Paulo's stock market collapsed 7.34% reaching 46.145 points and the Buenos Aires market lost 5.43%. Mexico IPC also was rattled dropping 4.34% stabilizing in 24.027 points. In Brazil companies linked to commodities suffered the most. At one point of trading the market was on the verge of the 10% loss which automatically suspends all activities for half an hour. Petrobras, Brazil's giant oil corporation lost 11.85%. Meantime the Brazilian currency closed at 2.02 Reales to the US dollar, having lost 5% from Wednesday. At the close of Thursday trading Argentina's Merval accumulated a 10.13% loss in the week and 29.32% since the beginning of the year. As in Brazil, Tenaris, the world's main manufacturer of tubes for the petroleum industry and one of Merval's main equities lost 11.35%. The Chilean stock exchange market was down 3.87%, with copper, the country's main export below 3 US dollars the pound and the Peso continuing to loose ground to the US dollar, 570 pesos. Peru's market lost 4.42%, Colombia, 0.90% and Caracas 0.15%. In spite of the poor showing a top official from the World Bank visiting Chile said Argentina, Paraguay, Uruguay and Chile are in a better position to address the international financial situation, although no country will be immune to the impact of the fallout. "Latinamerica overall and the four countries I mentioned, the desk I represent in the World Bank are far better positioned to protect themselves from the crisis than what they were when the Asian crisis or the problems faced by Brazil in 1999 and Argentina in 2001/02", said Pedro Alba WB director for the four countries. If the fallout comes it "will impact on commodity prices and volumes exported", but the region is better prepared, he insisted. The United Nations Economic Office for Latinamerican and the Caribbean, Cepal seated in Santiago also released good and bad news for the region. Executive Secretary Alicia Barcena said the region was well prepared for the crisis, "but will suffer on the investment side", with less money coming in and higher interest rates. She also said that Cepal had again revised down Latinamerican growth rate for this year with the new forecast standing at 4%.