Bovespa Futures Rise as Commodity Gain Outweighs GDP Concern

Bovespa stock-index futures rose, signaling the measure will advance for a third day, as climbing commodity prices boosted the outlook for Brazil’s producers, outweighing concern domestic growth will slow more than previously forecast.

Oil producer Petroleo Brasileiro SA (PETR4) and iron-ore miner Vale SA increased in U.S. trading as crude and metals prices rose. Banco Bradesco SA (BBDC4) may be active after the Financial Times cited Chief Executive Officer Luiz Carlos Trabuco saying the bank is confident it will succeed in buying a stake in Carrefour SA’s financial unit in Brazil. Financial shares may also move after a report said the government may take further measures to contain inflation.

Bovespa futures gained 1.3 percent to 68,325 at 8:10 a.m. New York time. The real strengthened 0.4 percent to 1.6592 per dollar.

The Bovespa stock index rose March 18, capping its second weekly increase this month, as homebuilders rallied and the Group of Seven nations acted to support Japan’s economy, leading stocks worldwide to rally.

Oil climbed as allied air strikes in Libya threatened to prolong a supply outage in Africa’s third-biggest producer. Copper rose in London on speculation demand for industrial metals will strengthen as Japan rebuilds after this month’s earthquake and tsunami.

Gross Domestic Product

Economists covering the Brazilian economy cut their forecast for 2011 gross domestic product growth for a fourth straight week, the central bank said.

Latin America’s largest economy will expand 4.03 percent this year, down from a week-earlier forecast of 4.10 percent, according to a March 18 central bank survey of about 100 economists published today. Analysts raised their forecast for 2011 consumer price inflation to 5.88 percent, from 5.82 percent previously.

Brazilian President Dilma Rousseff will take measures against inflation “soon,” O Estado de S. Paulo reported March 19, citing Vice-president Michel Temer. The government this week may expand the talks on the so-called macro-prudential measures to be announced, Temer said, according to the Sao Paulo-based newspaper.

Macro-prudential measures include policy makers’ move in December to raise reserve and capital requirements for local lenders.

Gerdau

Gerdau SA (GGBR4), Latin America’s largest steelmaker, and parent Metalurgica Gerdau SA (GOAU4) may move. Gerdau group is studying a 2 billion-real ($1.2 billion) share offering, Valor Economico reported, citing unidentified people close to the transaction. Valor didn’t specify which company may offer stock. Through its press department, Gerdau denied the information, according to the Sao Paulo-based newspaper.

OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, may move after the Brazilian petroleum regulator said it found evidence of gas in a well in Brazil’s Parnaiba basin.

Morgan Stanley recommended bullish options on Brazilian stocks, saying that food inflation “seems to be in check” while strong demand may allow the economy to grow 4 percent this year, according to a March 18 report from equity derivatives analysts including Viktor Hjort.

The Bovespa lost 3.5 percent this year through last week after homebuilders and banks retreated on concern rising inflation will spur additional measures to restrict credit growth. The index trades at 10.6 times analysts’ earnings estimates, according to weekly data compiled by Bloomberg. That compares to a ratio of 13.7 for the Shanghai Composite Index, 7.2 for Russia’s Micex, and 16.7 for India’s Sensex.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulous@bloomberg.net

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