Traders cut losses in Brazil companies after Rousseff win

lunes 27 de octubre de 2014 13:13 GYT

By Saqib Iqbal Ahmed

NEW YORK Oct 27 (Reuters) - Traders who had placed bullish bets on some of Brazil's biggest companies ahead of the country's presidential elections hastened to cut losses on Monday, a day after leftist Dilma Rousseff won a second term.

President Dilma Rousseff's narrow re-election victory over pro-business rival Aecio Neves on Sunday sent the U.S.-listed shares of Brazilian companies sharply lower on Monday as investors remained skeptical about her ability to turn around a troubled economy.

Activity in the options market showed investors were rushing to protect against further losses and cut bullish bets.

The iShares MSCI Brazil index fund fell about 6 percent to $39.94, bringing the past month's losses to 16 percent.

U.S.-listed shares of Petroleo Brasileiro, or Petrobras, fell 15 percent to $11, with more than 100 million shares traded, making it the most active stock on major U.S. exchanges Monday. Banco Santander was the second most active, falling 3 percent, with 77 million shares traded.

"The late election expectation on Friday were pretty convincing that Rousseff was going to win so I was a little surprised that we sold off as hard as we did," said Adam Perlaky, chief strategist at New York-based broker New Albion Partners LLC.

Polls late last week showed Rousseff with a lead of several points over Neves, though Brazilian companies' U.S. shares rallied on Friday, the last day of trading before the election.

Options on the Brazil index fund and the oil company were among the most actively traded names in the U.S. market on Monday, according to Livevol Inc data.   Continuación...