EMERGING MARKETS-Scandal-hit Petrobras drags down Brazil bourse; real slides further
RIO DE JANEIRO, Nov 14 (Reuters) - Brazil's state-run oil firm Petrobras dragged down the Brazilian bourse and added pressure on the real on Friday after it said it would delay the release of its quarterly results to allow more time to investigate corruption allegations. A scandal involving Petrobras escalated as Brazil's federal police said it was investigating contracts worth billions of reais between the oil company and seven of its service providers. Dozens of company executives were arrested this morning, including a former director with the oil firm. Petrobras' headlines further dampened market sentiment, which has already been depressed by uncertainty over Brazil's economic policies during the second term of newly re-elected president Dilma Rousseff. Seeking shelter, many investors have been buying dollars. In a fourth straight session of losses, the Brazilian real slid 1.36 percent to a session low of 2.6289 per dollar, its weakest since April 2005. It later trimmed losses to 2.6084 reais, a 0.6 percent drop on the day, after the central bank said it would increase as of Monday the rollover pace of currency swaps that expire early in December. Those swaps are derivative contracts that provide investors with protection against currency losses. "The real is poised to weaken in the long run, but the nomination of a market-friendly finance minister could bring some short-term relief," said Renato Magliari, a trader with WinTrade brokerage in Brazil. The real is on track to post a 1.6 percent loss for the week against the dollar. Investors are particularly anxious about who Rousseff will pick to replace Finance Minister Guido Mantega, as that would be key indication of whether she will allow substantial adjustments in economic policy over the next few years. Shares of Petrobras, or Petroleo Brasileiro SA, plunged 4.7 percent, weighing the most on the Brazilian bourse. They started trading more than one hour after the Brazilian stock market opened. Brazil's benchmark Bovespa index over 1 percent, erasing all of its 2014 gains. Banking shares also fell. While most Latin American stock indexes and currencies were in the red, the Mexican peso gained 0.6 percent after the central bank expressed concern about the impact of a weak currency on inflation. Key Latin American stock indexes and currencies at 1550 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging 989.27 -0.35 -0.99 Markets MSCI LatAm 2904.36 -1.53 -7.85 Brazil Bovespa 51176.48 -1.29 -0.64 Mexico IPC 43351.06 -0.9 1.46 Chile IPSA 3922.92 -0.23 6.05 Chile IGPA 19122.3 -0.17 4.91 Argentina MerVal 9752.52 -1.68 80.90 Colombia IGBC 12926.94 -0.28 -1.10 Peru IGRA 15342.96 -0.39 -2.61 Venezuela IBC 2910.61 2.08 6.36 Currencies daily % YTD % change change Latest Brazil real 2.6049 -0.46 -9.52 Mexico peso 13.528 0.58 -3.68 Chile peso 594.1 -0.03 -11.45 Colombia peso 2157.7 -0.51 -10.46 Peru sol 2.934 -0.14 -4.81 Argentina peso 8.5100 0.00 -23.71 (interbank) Argentina peso 12.85 4.28 -22.18 (parallel) (Reporting by Bruno Federowski and Walter Brandimarte)
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