Brazil's stocks drop sharply on US fears

AP News
Posted: Aug 08, 2011 5:47 PM
Brazil's stocks drop sharply on US fears

Brazil's stock market dropped 8.1 percent Monday, it steepest one-day dive in more than two years, tracking a global selloff on the first trading day since a downgrade in America's debt rating.

The Bovespa stock index ended at 48,668 points, it's lowest close since April 2009.

The main stock index in Latin America's biggest economy has been the biggest loser in the Americas this year. It's lost 30 percent since early January.

Gil Deschatre, head of the Deschatre investment fund in Rio de Janeiro, said the Bovespa was tracking the fall in the U.S. and Europe.

"We are all suffering because all of the international economic fluxes are mixed together. When there is a negative flux outside of Brazil everyone suffers," he said. "It is a general problem. It is unavoidable; nobody can escape this process."

Stocks included in the Bovespa dropped across the board _ not a single company rose.

Market heavyweights are the state-controlled energy company Petrobras and mining company Vale. Together they make up more than 20 percent of the index. Shares in Petrobras dropped 7.6 percent, while those of Vale slid 9.2 percent.