RIO DE JANEIRO--Brazilian stocks closed moderately lower
Wednesday, as the U.S. Federal Reserve's decision to continue
tapering its monetary stimulus measures put a damper on equities
worldwide.
The local Ibovespa index of most-traded shares closed 0.6% lower
at 47556.78 points. Volume was normal at 6.45 billion Brazilian
reais ($2.65 billion).
In an expected decision, the Fed on Wednesday opted to shave
another $10 billion off its monthly bond-buying program, which will
henceforth amount to $65 billion.
The stimulus, intended to support economic growth by effectively
reducing borrowing costs, is a legacy of the 2008-09 financial
crisis and global recession that had the side effect of sending
yield-hungry investors into stocks and emerging-market stocks.
State-owned energy firm Petrobras was among the big decliners in
Brazil Wednesday, falling 1.9% to BRL14.76, and banking giant
Bradesco tumbled 2.7% to BRL25.77.
Brazil's real also weakened to BRL2.4342 to the dollar from
BRL2.4281 at Tuesday's close, reflecting a broader trend in
currency markets.
But in doing so, the local currency became less overvalued--good
news for Brazil's exporters and steel companies, which face the
constant threat of imports from abroad.
Mining titan Vale shares surged 3.9% to BRL30.00, steelmaker
Gerdau rose 1.1% to BRL16.87, and paper and pulp maker Fibria
jumped 6% to BRL27.21.
Write to Paul Kiernan at paul.kiernan@dowjones.com