Brazil Stocks, Currency Slump on Global Worries

Brazilian stocks closed nearly flat on Friday in line with U.S. markets, as bargain hunters offset investors fretting over falling commodity prices and weak U.S. consumer confidence, while the real eased.

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The benchmark Bovespa index inched higher by 0.09 percent to close at 49,220.78 its first gain in six sessions, following a market holiday on Thursday.

Gains in the construction industry and mobile telephony as well as in oil giant Petrobras helped offset losses of commodity shares.

"After a long series of losses, investors here appear to prefer buying back their portfolios," said Pedro Galdi, analyst with SLW brokerage.

The real, Brazil's currency, fell 0.55 percent to close at 2.002 per dollar as the greenback strengthened broadly against a global basket of currencies.

U.S. indexes were mixed with poor consumer confidence figures weighing on investor sentiment.

The Dow industrial average and the S&P 500 Index ended lower, while the Nasdaq moved marginally higher.

A slump in commodities sent Brazilian steel and mining companies lower.

Steelmaker Usiminas plummeted 3.98 percent to 37.59 reais and Gerdau, the largest steelmaker in the Americas, fell 0.68 percent to 19.04 reais.

Brazilian miner Vale, the world's largest producer of iron ore, was down 0.43 percent at 28.05 reais as commodities slumped.

Vale this week raised $942 million from the sale of three-year notes convertible into stock at maturity.

On the upside, shares of state-run oil company Petrobras rallied 1.92 percent at 29.67 reais despite falling oil prices, after losing ground in recent days.

Investment bank USB Pactual raised its recommendation on Petrobras from neutral to buy.

U.S. crude oil futures dropped more than 1.0 percent on Friday, hitting the lowest level since mid-May, as the latest forecast from the International Energy Agency stirred more worries about oil demand.

Construction firms gained with foreign investors seeing bargains as a massive government plan to build low-cost houses is beginning to take shape, brokers said. Rossi Residencial jumped 8.3 percent to 9.27 reais.

Mobile telephone operators gained as investors bet Brazil's economy would recover faster than the U.S. or European economies. Vivo gained 4.54 percent to 38.26 reais and TIM Participacoes was up 4.1 percent to 3.54 reais.

Petrobras and Vale are the stocks with the biggest weighting in the Bovespa.

Yields on interest-rate futures at the BM&F Bovespa in Sao Paulo were lower across the board, signaling that investors expect Brazil's central bank to keep cutting its benchmark lending rate in the coming months.

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