SAO PAULO - Brazil's main stock market index closed at an all-time high Monday, an indication that investors feel the worst days of the country's economic slide could be over.

Sao Paulo's Bovespa index rose 1.7 per cent to 74,319 points, well above the previous record of 73,516 set May 20, 2008, when Brazil's economy was booming.

So far this year, Bovespa has climbed 23.4 per cent despite still high unemployment and political turmoil surrounding unpopular President Michel Temer and his key allies.

The rise was fueled in part by Temer getting Congress to approve a loosening of work rules and his surviving a corruption allegation that could have suspended him from office. Stock prices also were boosted when former left-of-centre President Luiz Inacio Lula da Silva, seen as an opponent of economic austerity measures, was convicted of corruption and became less likely to run for office next year.

Many analysts are cautious about the euphoria in a nation whose broad economy is still in trouble.

Andre Perfeito, a chief economist at broker Gradual Investimentos, believes the Bovespa's steep rise is "a monetary illusion."

"The reasons that support our stock market are largely signs of how weak the Brazilian economy is; it is not the opposite," Perfeito said in a research note to clients. "I believe there should be caution in linking the stock market behaviour and that of the country. Our stock market is too small if compared to the diversity of the Brazilian economy."

Among the reasons mentioned by brokers to support the rise of the stock market are the fall of Brazil's interest rates to a four year low of 8.25 per cent, the rebound from recession with 0.2 per cent growth in the second quarter and the approval by Congress of a budget deficit of up to 159 billion Brazilian reals ($51 billion) in 2017 and 2018.

Still, more than 13 million people are unemployed and business activity remains slow.

Temer's efforts to overhaul the economy could face a new distraction later this week if Brazil's top prosecutor formally accuses the president of obstruction of justice and being member of a criminal organization. He has until Sunday to decide if he will file that charge. The question of a trial would go to the highest court and then to Congress, but even if Temer survived once more, legislators might have little time this year to pass an unpopular pensions reform.

News from © The Associated Press, 2017