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Saturday, October 27, 2007
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Oct 27 2007 2:29AM
UPDATE 1-Brazilian markets rally on Bovespa IPO

(Updates with closing prices and central bank)

SAO PAULO, Oct 26 (Reuters) - Brazil's currency and stock market were up from open to close on Friday, boosted by a stellar debut of the burse's own initial public offering of stock as well as positive earnings on international markets.

The Sao Paulo Stock Exchange's Bovespa index <.BVSP> closed up more than 3 percent at a record high of 64,275 points. Shares of Bovespa Holding <BOVH3.SA>, the controller of the Sao Paulo Stock Exchange, rallied more than 52 percent to close at 34.99 in its first day of trade following its initial public offering.

Traders said that dollar inflows drawn to the Bovespa Holding's IPO helped strengthen the local currency.

Brazil's currency firmed more than 1 percent to 1.778 per dollar. The real, which has appreciated about 20 percent this year against the dollar, is trading at its strongest level since April 2000.

The central bank intervened again in the foreign exchange market to buy dollars. It has been purchasing dollars on a daily basis since Oct. 8, helping to mop up excess dollars in the market and to lift Brazil's foreign reserves to an all-time high of more than $164 billion.

The bank also said on Friday it sold all reverse currency swaps offered in an auction, as it works to roll over similar paper that is maturing and curb gains in the country's currency. The bank sold about $2.5 billion in swaps, or 53,200 contracts.

The central bank also announced after the market closed that it would be replacing three of its directors. For details, see [ID:nN26401956].

Stocks in mining giant CVRD, one of Bovespa's top heavyweights, closed up 4.9 percent at 52.60 reais. The company reported a 23 percent rise in third-quarter earnings over a year ago, after market close on Thursday. [ID:nN25237449]

Bovespa's top heavyweight, state oil company Petrobras <PETR4.SA>, gained momentum late in the day to close up over 4.4 percent at 71.10 reais, outperforming most of the Brazilian market. Near-record world oil prices have helped drive the stock to hit its new closing high for the year. ((Reporting by Reese Ewing; editing by Jonathan Oatis; Reuters Messaging: [email protected]; e-mail [email protected]; tel+5511-5644-7721)) Keywords: MARKETS BRAZIL

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