Home Business Brazil stocks track commodities higher, political worries linger

Brazil stocks track commodities higher, political worries linger


Brazilian stocks rose on Monday, supported by shares of miners and planemaker Embraer SA, though lingering concerns that a political crisis could delay structural reforms kept a lid on gains.

Shares of miner Vale SA added the most points to Brazil’s benchmark Bovespa stock index, tracking iron ore futures higher. Embraer SA was the biggest gainer on the Bovespa as traders bet on fresh orders for the jetmaker at the start of the Paris Airshow, the global aviation industry’s biggest event.

Still, concerns remained that a mounting political scandal may further hamper the implementation of President Michel Temer’s reform agenda, curbing investor demand for higher-risk Brazilian assets.

Temer on Saturday pledged to sue billionaire businessman Joesley Batista, the founder of meatpacker JBS SA, strongly rebuffing his accusations that he led a corruption scheme in which politicians squeezed high-profile executives for bribe. Shares of JBS dropped 3.4 percent, leading losses on the Bovespa index.

The Brazilian real weakened as much as 0.8 percent amid the political uncertainty before paring losses to around 0.2 percent. The Mexican peso also slipped as traders booked gains from a recent rally that last week drove it to a thirteen-month peak against the dollar, while the country’s S&P/BVM IPC stock index followed crude prices lower.

Trading in Latin American markets was mostly thin, with investors sticking to the sidelines as they awaited further hints over the pace of U.S. interest rate increases over the coming months.