Sao Paulo/Rio de Janeiro - For the first time in close to a decade the Brazilian stock exchange in Sao Paulo had to suspend activities for half an hour Monday, after its Bovespa index crashed 10.6 per cent. Trading was temporarily halted at 2:49 pm (1749 GMT), following news that the US
House of Representatives rejected a 700-billion- dollar bailout plan to rescue the economy from the brink of
financial meltdown.
When trading resumed, share prices continued to fall, dipping as low as 13 per cent. A second suspension - potentially for an hour, as established for cases in which the slide touched 15 per cent - was avoided. At closing, stocks were down 9.36 per cent.
Meanwhile, in
Mexico City, the IPC index lost 6.4 per cent and Argentina's Merval index dropped 8.7 per cent.
The previous suspension of trading at the Brazilian stock exchange took place on January 14, 1999, in the middle of a foreign exchange crisis that led to a major devaluation of the Brazilian real.
In this context, Brazilian President Luiz Inacio Lula da Silva called for "wisdom" among
United States authorities in the face of the ongoing credit crisis.
"The emerging countries, that did everything right, cannot now be victims of the casino that (the bankers) set up in the United States," Lula said.
"It is time for the US Congress to take on the responsibility that corresponds to it. They created the problem, and that is why it is they who have to solve it," he said.
Lula claimed that Brazil's economy - the tenth largest in the world - would not be "contaminated" by the financial turmoil in the north.
"We are aware of the seriousness of the crisis, but we are sure that exports and imports are still fine, and that our
industry is still fine. We are conscious of what is happening, but we are calm," Lula said.
Referring to Monday's crash in Brazilian stocks, he said: "The stock exchange historically rises and falls. That is not the problem. And it is not just the Brazilian stock exchange, but the stock exchanges around the world."
Brazilian Finance Minister Guido Mantega said he believed that the US Congress would eventually pass a bail-out plan and noted that the current credit crunch had not affected the Brazilian economy.
"We have quite a solid fiscal situation, inflation is under control," Mantega said.
