Nov. 9 (Bloomberg) -- Brazilian stocks rose to a two-week high as commodities gained after the Group of 20 nations agreed to maintain stimulus measures and analysts increased their forecasts for growth in Latin America’s biggest economy.

Petroleo Brasileiro SA and Vale SA rose more than 2 percent as oil and metals prices gained. Usinas Siderurgicas de Minas Gerais SA, the biggest maker of flat steel for the auto industry, rallied 3.3 percent after vehicle production expanded in October. Rossi Residencial SA led homebuilders’ gains after Credit Suisse Group AG raised share forecasts for the industry.

“The result of the G-20 meeting was that they won’t remove the stimulus measures and will maintain an expansionist monetary policy for longer than the majority of investors expected, which is good news for not only stocks but other riskier investments,” said Guilherme Figueiredo, who helps manage $1 billion as director at M Safra & Co. in Sao Paulo.

The Bovespa added 2.7 percent to 66,214.31, the highest since Oct. 19. The BM&FBovespa SmallCap Index gained 2.4 percent. The real rose 1.3 percent to 1.6989 per U.S. dollar, a 14-momnth high. In other Latin American markets, Mexico’s Bolsa index advanced 2.2 percent and Chile’s Ipsa rose 1.1 percent.

Global stocks rallied after policy makers from the U.S., U.K., Japan and 17 nations said on Nov. 7 that it’s too early to withdraw spending intended to revive growth. Commodities climbed as the dollar dropped.

Petrobras, Vale

Petrobras added 2.9 percent to 37.08 reais. Crude for December delivery rose 2.6 percent on the New York Mercantile Exchange. Vale gained 3.3 percent to 43 reais as the Bloomberg Base Metals 3-Month Price Commodity Index increased for the first time in three days.

Brazil’s economy may grow 4.83 percent in 2010, more than a week-earlier forecast of 4.8 percent, according to the median forecast in a Nov. 6 central bank survey of about 100 economists published today. Prices as measured by the IPG index will likely fall 0.47 percent this year, according to the survey.

“The market is coming to the conclusion that short-term inflation is rather benign, which means the central bank can push back any rate increases to sometime in the second half of next year,” said Figueiredo.

Policy makers in Brazil have cut the benchmark interest rate five times this year to a record 8.75 percent, helping pull the economy from its first recession since 2003. The so-called Selic rate will end next year at 10.5 percent, according to the central bank survey.

Vehicle Production

Usiminas, as Brazil’s second-biggest steelmaker is known, rose 1.58 reais to 49.38 reais. Vehicle production surged 6.3 percent to 315,956 in October from a year earlier, the country’s automakers association said. Registrations of new cars, trucks and buses rose 23 percent to 294,466 in October, Anfavea, as the association is known, said in Sao Paulo today.

Rossi Residencial rose 4.3 percent to 13.45 reais. The Brazilian homebuilder was among developers that had their share- price forecasts raised at Credit Suisse Group AG, which cited valuations and the industry’s growth prospects.

“We reiterate our positive view on the homebuilding sector, which is still trading at single-digit multiples for next year, despite the strong growth potential,” Credit Suisse analysts said in a note to clients.

They boosted their share-price estimate for Rossi by 11 percent to 20 reais and reiterated the shares as a “top pick,” along with MRV Engenharia e Participacoes SA and PDG Realty SA Empreendimentos e Participacoes.

MRV rose 5.3 percent to 37.60 reais, while PDG added 4.2 percent to 16.30 reais.

Homebuilders

Homebuilders are three of the top five stock performers on the Bovespa this year. Rossi, Gafisa SA and Cyrela Brazil Realty SA Empreendimentos e Participacoes have gained more than 160 percent.

The Bovespa has had the world’s biggest advance in 2009 among the 89 indexes tracked by Bloomberg on dollar terms, gaining 140 percent. In the local currency, the index has jumped 76 percent.

Mexico Stocks

The Bolsa rose for a fifth day. Makers of construction materials gained on speculation the passage of a health care plan in the U.S. House of Representatives improves prospects for infrastructure companies, said Francisco Suarez, head of Latin American equities research for Mexico City-based Actinver SA.

Mexichem SAB led gains on the index, rising 6.6 percent to 23.92 pesos. The largest maker of plastic pipes in Latin America rose after the company said it sold $350 million of 10-year bonds to yield 8.75 percent on Nov. 6.

Cemex Gains

Cemex SAB, the world’s third-largest cement maker, rose 6.4 percent to 15.73 pesos. Empresas ICA, Mexico’s largest construction company, advanced 4.8 percent to 30.82 pesos.

“The health care bill finally passed in the House, and now they’re discussing stimulus incentives for infrastructure companies,” Suarez said. “That would have a direct positive effect on companies like Cemex.”

Grupo Financiero Banorte SAB advanced to the highest level since June 2008, gaining 4 percent to 46.91 pesos. Mexico’s largest publicly traded lender was raised to “buy” from “hold” at Banco Santander SA.

“We believe that the worst in terms of non-performing loans and return on equity for Banorte is over,” New York-based analyst Boris Molina wrote in a note to clients today.

To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net; Emily Schmall in Mexico City at eschmall@bloomberg.net

Last Updated: November 9, 2009 16:46 EST