Diana Kinch – Wall Street Journal, 8/10/2012
RIO DE JANEIRO–Brazilian share prices fell in early trading Friday, after disappointing Chinese trade figures renewed concerns over the global economy and depressed markets worldwide.
The benchmark Ibovespa index slipped to 58150 points shortly after opening, 1% below Thursday’s close of 58797 points.
China’s release of weaker-than-expected July trade data highlighted concern over recovery prospects in both the Chinese domestic and global economies, damping markets globally and hitting oil and other commodity prices. The Asia giant is Brazil’s biggest trading partner.
China’s trade surplus fell to $25.2 billion in July from $31.7 billion in June, and was almost $10 billion below expectations for the month. According to Banco Santander (BSBR), the weak export performance reflects lowering demand for Chinese products worldwide, which should take further steam out of Chinese industrial production, while the weaker-than-expected import levels indicate Chinese internal demand is also weakening.
The Chinese trade figures followed data on lower Chinese bank lending rates in July, and Thursday’s weaker industrial production figures from the Asian giant. Economists said the various indicators have created negative sentiment that has dashed market expectations the Chinese economy, which dominates world trade, will recover in the third quarter.