Shares surge in Brazil

The Brazilian stock market surged by more than 3 per cent soon after opening yesterday, after the International Monetary Fund pledged a rescue package for the troubled economy.

However, the rally in the Bovespa index weakened later in the day, after the Dow Jones Industrial Average dipped into negative territory. At lunchtime, the Bovespa was trading up 149.22 points - or 2.4 per cent - at 6324.42.

On Thursday, the IMF said it supported the new economic policies proposed by Fernando Cardoso, the Brazilian president, and that there were hopes that Brazil could be "supported financially by the IMF and other members of the international community". Analysts said the IMF pledge had reduced the risk of a devaluation in the real, the Brazilian currency.