Reply #66: Brazil stocks rise on bargain hunting, real drops

[Ghost Dog]

SAO PAULO, Aug 5 (Reuters) - Brazil's stock market rose on Tuesday as investors went bottom fishing for shares such as mining company Vale and banking giant Itau, which had tumbled in recent sessions.

The Bovespa index .BVSP of the Sao Paulo stock exchange was up 1.7 percent at 56,547.29, the first gain after a three-day rout that wiped out nearly 7.3 percent in value from the index and pushed it to its weakest since Jan. 23.

The exchange had record net foreign investment outflows of 7.6 billion reais in July, surpassing a previous all-time high of 7.4 billion reais in outflows in June.

Foreign investors, which account for nearly one-third of trading at the exchange, have been selling assets in Brazil to cover losses in the United States and Europe, traders said.

Blue-chip stocks Vale and Petrobras lost at least 10 percent in the previous three sessions as prices of oil and other commodities declined, bringing the entire index down.

"The market today is making up for the excessive declines of the past days, even as lower commodity prices hurt those companies with the heaviest weight on the index," said Carlos Alberto Ribeiro, a director at brokerage Novacao. "We are also taking advantage of a positive scenario abroad."

/... http://www.reuters.com/article/marketsNews/idCNN0531233120080805?rpc=44&sp=true