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ECONOMY | 11-03-2020 12:07

Argentine, Brazilian stock exchanges rebound from 'Black Monday' crash

Argentina's Merval index rebounded eight percent on Tuesday after having crashed by almost 14 percent on Monday.

The São Paulo and Argentine stock exchanges rebounded on Tuesday after damaging crashes on Monday when global markets panicked over the new coronavirus and a plunge in oil prices.

The São Paulo Ibovespa index experienced a volatile day, opening up 6.5 percent and seeing those gains whittled away to less than 2.5 percent before closing with a gain of more than seven percent after plummeting 12 percent on Monday.

That was biggest single day losses since 1998 in Latin America's biggest stock exchange.

Argentina's Merval index rebounded eight percent having crashed by almost 14 percent on Monday.

Despite the rebound "the perspectives are not good given that coronavirus continues to expand and that's on top of Saudi Arabia announcing it will increase its crude oil production to a record level in April," said Joaquin Candia, an analyst at Rava, quoted on the ambito.com website.

"Coronavirus and the oil market are factors that increase pressure on the stock market, which is experiencing a correction after a long period of rising."

Argentina recorded on Saturday the first death from coronavirus in Latin America.

The Merval index's recovery was led by the YPF oil company that gained 12.4 percent in value while the BBVA bank's stocks rose by 11.7 percent.

Some 105 companies saw their stocks increase in value compared to 42 experiencing drops.

The Ibovespa's partial recovery was attributed to expectations that the United States would announce measures to compensate for the impact of the coronavirus.

The recovery was led by retail distribution companies such as the Via Varejo chain whose stocks rose more than 21 percent, and primary materials such as the Vale mining company whose shares rose almost 18.5 percent.

State-controlled oil giant Petrobras surged in the morning, with gains were around just nine percent at close.

Petrobras' stocks had crashed by around 30 percent on Monday after global oil prices suffered their biggest drop since the 1991 Gulf War.

Trading was suspended for 30 minutes on Monday after a sudden plunge of 10 percent triggered automatic circuit breakers.

Brazil's real also showed signs of recovery, trading at 4.68 to the dollar early on Tuesday after having dropped to a record low of 4.79 on Monday.

– AFP

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