(Updates prices, includes stocks opening)
SAO PAULO, March 18 (Reuters) - Yields on Brazilianinterest rate futures contracts <0#DIJ:> plunged early onThursday, the first trading session after the central bank heldoff on tightening its benchmark interest rate.
The yield on the contract due April 2010 DIJJ0 fell to8.626 percent from 8.803 percent. The yield on the contractJuly 2010 DIJN0 tumbled to 9.1 percent from 9.28 percent.
Both were among the most highly traded contracts of themorning.
In a split vote, Brazil"s central bank held the benchmarkrate, the Selic, at 8.75 percent after Wednesday"s marketclose. For more see [ID:nN17167375].
There had been little consensus among economists andanalysts before the meeting over which was likelier: a hike inMarch or one in April.
Policymakers pushed back the tightening cycle by at leastone more meeting, even as a rapid recovery in Latin America"slargest economy stokes fears of mounting inflation.
"In its communique, the Central Bank said that it willclosely monitor the evolution of the macroeconomic outlookuntil its next meeting, and then will decide monetary policystrategy next steps. This signals a probable raise in the April27-28 meeting," Ilan Goldfajn, a former central bank directorand now chief economist with Itau Unibanco, wrote in a note toclients.
STOCKS SEESAW
Brazilian stocks saw choppy trading early on Thursday,falling into and out of the red.
The benchmark Bovespa stock index .BVSP fell 0.13 percentto 69,622.09.
Brazil"s currency, the real (BRBY), weakened 1 percent to1.784 per U.S. dollar as the greenback advanced against abasket of major currencies .DXY.
Investors were weighing the effects of monetary tighteninglikely to come in April, said Adriano Moreno, a strategist withFutura Investimentos in Salvador, in northeastern Brazil.
But he also noted that the Bovespa index was facingtechnical resistance around the 70,000-point mark.
"The market is having a hard time working above thatlevel," he noted.
Stocks could see more uneven trading on Thursday, he added,largely fluctuating near the flat mark.
Heavyweight stocks seesawed, adding to Bovespa volatility.
Vale (VALE5.SA), the world"s largest iron ore miner, fell0.1 percent to 47.65 reais.
State-controlled energy giant Petrobras (PETR4.SA), themost heavily-weighted stock in the index, fell 0.1 percent to37.13 reais.
Steelmaker CSN (CSNA3.SA) dropped 0.3 percent to 67.19reais and Itau Unibanco (ITUB4.SA), the largest private-sectorbank in Brazil, dropped 0.69 percent to 37.24 reais.
Among initial public offerings in Brazil, wind power andhydroelectric generator Renova Energia (RNEW11.SA) halted aplanned IPO for up to 60 days, after shipbuilder OSX Brasil(OSXB3.SA) sharply pared its proposed sale. [ID:nN18184917] (Reporting by Luciana Lopez; Editing by Padraic Cassidy)
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