- Title: Brazilian stock exchange plummets with corruption allegations against Temer
- Date: 18th May 2017
- Summary: VARIOUS CLOSE-UPS OF GRAPHICS ON COMPUTER SCREEN VARIOUS OF MIRAE ASSET DIRECTOR, PABLO SPYER, POINTING TO COMPUTER SCREEN
- Embargoed: 1st June 2017 19:37
- Keywords: markets Brazilian stock exchange Brazil Michel Temer
- Location: SAO PAULO, BRAZIL
- City: SAO PAULO, BRAZIL
- Country: Brazil
- Topics: Economic Events
- Reuters ID: LVA0026HDAY4J
- Aspect Ratio: 16:9
- Story Text: Brazilian markets slumped on Thursday (May 18) after the Supreme Court authorized an investigation into President Michel Temer and allegations that he condoned bribery of a potential witness in the massive "Car Wash" graft probe.
The news sent Brazilian stock and currency markets tumbling and raised doubts that Congress would pass Temer's austerity measures.
Brazilian stocks triggered a 30-minute circuit breaker after the benchmark Bovespa index fell 10 percent, whilst the Brazilian real weakened about 7.3 percent against the U.S. dollar.
Sao Paulo-based investment broker, Pablo Spyer, said the industry was waiting to hear the content of an audio recording that allegedly captured Temer conspiring to obstruct justice with Joesley Batista, chairman of meat company JBS SA, in order to assess the scale of the fallout.
Shares of state-controlled companies, such as Banco do Brasil SA and Petroleo Brasileiro SA, or Petrobras, lost about a fifth of their value. The iShares MSCI Brazil ETF tumbled 15.6 percent in 6.5 times the average volume over the past 10 trading days, whilst U.S.-traded shares of mining giant Vale and Brazilian state-controlled oil company Petrobras tumbled 6.4 percent and 15.3 percent respectively.
Brazil's Treasury and central bank said they stood ready to keep markets liquid and working properly.
Temer denied any wrongdoing and strongly resisted growing calls for him to resign.
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