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Bovespa-Index Futures Rise as Brazil Retail Sales Top Estimates

Bovespa-index futures advanced after a report showed retail sales in Brazil increased more than forecast, easing concern that the economic recovery will falter.

JBS SA (JBSS3), the world’s biggest beef producer, may be active after reporting fourth-quarter earnings that beat analysts’ forecasts. Banco do Brasil SA, Latin America’s biggest bank by assets, may move after Bank of America Corp. lowered its recommendation to the equivalent of hold.

Bovespa-index futures contracts expiring in April retreated 0.4 percent to 57,740 at 9:06 a.m. in Sao Paulo. The real weakened 0.2 percent to 1.9753 per dollar.

Brazil’s retail sales increased 5.9 percent in January from a year earlier, the national statistics agency reported today. The median forecast of 29 analysts surveyed by Bloomberg was for an increase of 5.5 percent.

Lenders Banco Indusval SA and Banco Industrial e Comercial SA may be active after Standard & Poor’s revised their rating outlook to negative along with four other mid-sized banks. Insurance company Porto Seguro SA (PSSA3) may move after it was raised to the equivalent of hold at Credit Suisse Group AG.

The Bovespa (IBOV) has dropped 9.4 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index (MXBRIC) of shares in Brazil, Russia, India and China has slid 4 percent over the same period.

Brazil’s benchmark equity gauge trades at 11.6 times analysts’ earnings estimates for the next four quarters, compared with 10.9 for the MSCI Emerging Markets Index (MXEF) of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 7.64 billion reais ($3.87 billion) yesterday, which compares with a daily average of 7.6 billion reais this year through March 12, according to data compiled by the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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