Brazil real rallies on interventions, stocks slump

(Updates to close)

By Todd Benson

SAO PAULO, Oct 8 (Reuters) - Brazilian stocks slumped in volatile trade and the currency rallied after plunging to a 3-1/2-year low on Wednesday, helped by a slew of central bank interventions as fears about the global financial crisis hung over the market.

The Bovespa index .BVSP of the Sao Paulo Stock Exchange tumbled for the fifth straight session, ending 3.85 percent lower at 38,593.54 points after falling as much as 6.3 percent. With the losses, the Bovespa has now plunged 48 percent since hitting an all-time high of 73,920 on May 29.

Trading was extremely volatile as fears persisted that the coordinated interest rate cuts by the world's leading central banks might not be enough to prevent the global economy from slipping into a recession.

"The coordinated actions by the central banks is not going to have a convincing effect on the credit crisis," said Jose Francisco de Lima Goncalves, chief economist at Banco Fator.

Brazil's currency, the real BRBY, also took a pounding early in the session but recovered after the central bank intervened four times to flood the market with dollars.

The real closed 0.74 percent stronger at 2.294 per dollar after plunging more than 8 percent to 2.53 in spot electronic trading <BRL02=BMF> at the BM&F commodities and futures exchange, its weakest intraday level since April 29, 2005.

The central bank helped the real snap a five-session losing streak by dipping into its international reserves for the first time in more than five years to sell dollars on the spot foreign exchange market.