Sao Paulo/Rio de Janeiro - For the first time in close to a
decade the Brazilian stock exchange in Sao Paulo had to suspend
activities for half an hour Monday, after its Bovespa index crashed
10.6 per cent.
Trading was temporarily halted at 2:49 pm (1749 GMT), following
news that the US House of Representatives rejected a 700-billion-
dollar bailout plan to rescue the economy from the brink of financial
meltdown.
When trading resumed, share prices continued to fall, dipping as
low as 13 per cent. A second suspension - potentially for an hour, as
established for cases in which the slide touched 15 per cent - was
avoided. At closing, stocks were down 9.36 per cent.
Meanwhile, in Mexico City, the IPC index lost 6.4 per cent and
Argentina's Merval index dropped 8.7 per cent.
The previous suspension of trading at the Brazilian stock exchange
took place on January 14, 1999, in the middle of a foreign exchange
crisis that led to a major devaluation of the Brazilian real.
In this context, Brazilian President Luiz Inacio Lula da Silva
called for 'wisdom' among United States authorities in the face of
the ongoing credit crisis.
'The emerging countries, that did everything right, cannot now be
victims of the casino that (the bankers) set up in the United
States,' Lula said.
'It is time for the US Congress to take on the responsibility that
corresponds to it. They created the problem, and that is why it is
they who have to solve it,' he said.
Lula claimed that Brazil's economy - the tenth largest in the
world - would not be 'contaminated' by the financial turmoil in the
north.
'We are aware of the seriousness of the crisis, but we are sure
that exports and imports are still fine, and that our industry is
still fine. We are conscious of what is happening, but we are calm,'
Lula said.
Referring to Monday's crash in Brazilian stocks, he said: 'The
stock exchange historically rises and falls. That is not the problem.
And it is not just the Brazilian stock exchange, but the stock
exchanges around the world.'
Brazilian Finance Minister Guido Mantega said he believed that the
US Congress would eventually pass a bail-out plan and noted that the
current credit crunch had not affected the Brazilian economy.
'We have quite a solid fiscal situation, inflation is under
control,' Mantega said.
USA
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