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Around the World's Markets: Sao Paulo

Tuesday 12 January 1999 00:02 GMT
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Brazilian share prices were sharply lower in early afternoon trade amid persistent worries over the nation's financial health. The Bovespa index was trading down more than 7 per cent at 6304.64 as investors continued to digest the decision by Minas Gerais, the Brazilian state, to default on debt payments to the government. The market was also unnerved by heavy dollar flight from Brazil, negative trade balance data and uncertainty over interest rate policy, according to traders. One said: "The market remains afraid of further defaults from other states."

Rumours about the possible resignation of Pedro Malan, the finance minister, continued to depress sentiment.

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