SAO PAULO Brazilian shares closed
higher on Wednesday as investors relaxed about the potential
threat to the country's economic recovery from a Senate inquiry
into a currency market scandal, traders said.
Sao Paulo's benchmark Bovespa index closed 2.2 percent higher
"The market calmed down a bit," one trader said.
"Yesterday Mauch gave testimony and nothing problematic
happened," referring to testimony by a former Central Bank
banking supervision director, Claudio Mauch.
On Tuesday, senators investigating the scandal questioned
Mauch, but he only reiterated what the panel had already heard
from Central Bank president Arminio Fraga.
The Bovespa index has soared since a January currency
devaluation made shares cheaper in dollar terms and as investors
bet on Brazil's rebound from economic crisis. Recent allegations
that the Central Bank leaked information ahead of the
mid-January devaluation has stalled the market's rise.
Traders said the forex scandal had cooled somewhat after
former Central Bank chief Francisco Lopes refused to testify in
front of the Senate, choosing to present his case to legal
authorities. Even so, an atmosphere of caution was expected to
govern the market while the investigation continued.