By Dow Jones Business News,
January 29, 2014, 03:36:00 PM EDT
RIO DE JANEIRO--Brazilian stocks closed moderately lower Wednesday, as the U.S. Federal Reserve's decision to continue
tapering its monetary stimulus measures put a damper on equities worldwide.
The local Ibovespa index of most-traded shares closed 0.6% lower at 47556.78 points. Volume was normal at 6.45 billion
Brazilian reais ($2.65 billion).
In an expected decision, the Fed on Wednesday opted to shave another $10 billion off its monthly bond-buying program,
which will henceforth amount to $65 billion.
The stimulus, intended to support economic growth by effectively reducing borrowing costs, is a legacy of the 2008-09
financial crisis and global recession that had the side effect of sending yield-hungry investors into stocks and
State-owned energy firm Petrobras was among the big decliners in Brazil Wednesday, falling 1.9% to BRL14.76, and
banking giant Bradesco tumbled 2.7% to BRL25.77.
Brazil's real also weakened to BRL2.4342 to the dollar from BRL2.4281 at Tuesday's close, reflecting a broader trend
in currency markets.
But in doing so, the local currency became less overvalued--good news for Brazil's exporters and steel companies,
which face the constant threat of imports from abroad.
Mining titan Vale shares surged 3.9% to BRL30.00, steelmaker Gerdau rose 1.1% to BRL16.87, and paper and pulp maker
Fibria jumped 6% to BRL27.21.
Write to Paul Kiernan at email@example.com
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