Sept. 8 (Bloomberg) -- Brazilian stocks rose for a second day, led by homebuilders and banks, as the U.S. government's takeover of the two biggest mortgage finance companies boosted confidence in the global financial system and inflation eased.

Uniao de Bancos Brasileiros SA, Brazil's third-largest non- state bank by assets, climbed the most in eight weeks as the government takeover of Fannie Mae and Freddie Mac bolstered expectations that banks will recover from $507 billion in credit losses. Cyrela Brazil Realty SA Emprendimentos e Participacoes led a rally in homebuilders after economists cut their forecasts for inflation this year. Usinas Siderurgicas de Minas Gerais paced gains for steelmakers after Raymond James & Associates said domestic steel prices will be sustained on rising demand.

``Resolving this crisis of confidence in the U.S. financial system is an important step for the world to continue growing,'' said Regis Abreu, who helps manage about 1.8 billion reais in assets at Mercatto Gestao de Recursos in Rio de Janeiro. ``Without credit you don't have consumer spending, without consumer spending you don't have growth.''

The Bovespa index climbed 185.24, or 0.4 percent, to 52,124.84 at 11:30 a.m. New York time. The MidLarge Cap index gained 0.4 percent, while the Small Cap index added 1.6 percent. Mexico's Bolsa rose 1 percent and Chile's Ipsa index advanced 0.5 percent. The MSCI Latin America index surged 0.9 percent.

The U.S. Federal Housing Finance Agency will take over mortgage-finance companies Fannie Mae and Freddie Mac to help banks recover from more than $500 billion in subprime mortgage losses, the U.S. government said yesterday. The government will also help home-loan banks and purchase mortgage-backed debt in the open market.

Banks Rally

Uniao de Bancos Brasileiros, also known as Unibanco, rose 2.5 percent to 19.16 reais. Banco Bradesco SA, Brazil's largest non-government bank, gained to the highest in a month, climbing 2 percent to 30.85 reais.

Consumer discretionary companies including homebuilders led the 10 industry sectors in the MSCI Brazil Index.

Brazil's inflation rate will end 2008 at 6.27 percent, less than forecast last week, the central bank survey of economists showed. Brazil's economic expansion isn't stoking inflation, Finance Minister Guido Mantega said in Brasilia today.

Cyrela, Brazil's biggest property developer, surged 4.8 percent to 19.02 reais. Gafisa SA, Brazil's second-largest real estate developer, advanced for a second day, advancing 2 percent to 23.15 reais. Constructora Tenda SA, which agreed to sell a controlling stake to Gafisa last week, rose to the highest in a week, climbing 3.8 percent to 3.27 reais.

Usiminas advanced for the first time in six days, gaining 0.3 percent to 49.15 reais.

Buy Blue Chips

Brazil's largest stocks are trading below ``fair value'' and investors should begin buying them, Raymond James & Associates said. ``We consider it makes sense to start rebuilding positions,'' analyst Ricardo Cavanagh wrote.

Brazil is ``financially solid'' and commodity prices are unlikely to go into a secular bear market, the analyst said.

The S&P GSCI index of 24 commodity futures rose for the first time since Aug. 27, advancing 1 percent.

Magnesita Refratorios SA, Latin America's biggest maker of tiles used in steel furnaces, rose the most in almost three weeks after saying it agreed to buy a rival for $394 million in cash and stock. Magnesita advanced 3.7 percent to 18.25 rais.

State-controlled utility Cia. Energetica de Sao Paulo fell the most in four weeks after Deputy Energy Minister Marcio Pereira Zimmerman declined to confirm a news report that the federal and state governments reached agreement that could lead to the sale of a minority stake in the electric producer. Cesp, as the company is known, fell 5.7 percent to 21.39 reais.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net. William Freebairn in Mexico City at wfreebairn@bloomberg.net

Last Updated: September 8, 2008 11:35 EDT