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Sao Paulo exchange plummets more than 12%

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Sao Paulo (AFP)

Brazil's Sao Paulo exchange plummeted more than 12 percent Monday as global markets recoiled from the coronavirus epidemic and a deep plunge in oil prices.

The Ibovespa index, which had fallen by 4 percent on Friday, dropped more than 10 percent in early trading, forcing a temporary suspension.

Trading was suspended for 30 minutes after the sudden plunge triggered automatic circuit breakers, and stocks stabilized briefly following the resumption before slipping again to close at over 12 percent down.

Shares of state-controlled oil giant Petrobras lost more than 31 percent after global oil prices crashed in the biggest drop since the 1991 Gulf War. Domestic airlines Gol and Azul dropped 17 percent.

The real continued to lose ground against the dollar, trading at 4.80, compared to 4.60 on Friday.

Meanwhile, Chile's peso was trading at an all-time low against the dollar, which was worth 842 pesos early Monday.

Continuing the global trend, the Buenos Aires stock exchange opened down by more than 9.0 percent, before closing the day down by 13.75 percent. Argentina on Saturday recorded the first death from the coronavirus in Latin America.

Official figures released last week showed the Brazilian economy slowed in President Jair Bolsonaro's first year in office.

"The scenario will remain volatile. Every day it's more difficult to foresee market behavior, with risks everywhere. The coronavirus is advancing in the West, we already have bad news on the Brazilian economy and we are beginning to see the impact on Western economies," said analyst Henrique Esteter of Guide investment consultants.

Brazil's economy grew 1.1 percent in 2019, down from 1.3 percent in each of the previous two years, the national statistics institute, IBGE, reported.

Growth for the fourth quarter came in at 0.5 percent.

When Bolsonaro took office, analysts forecast economic growth of around 2.5 percent for the year.

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