Ibovespa Futures Advance as Brazilian Inflation Forecast Lowered

Ibovespa futures rose as economists covering Brazil reduced their forecasts for inflation, easing concern that higher prices will sap the recovery in Latin America’s largest economy.

Banco Bradesco SA, Brazil’s second-biggest bank by market value, may move after its second-quarter earnings trailed analysts’ estimates. Oil company HRT Participacoes em Petroleo SA may be active after saying that it failed to find oil in a well drilled in Namibia.

Ibovespa futures contracts expiring in August rose 0.2 percent to 47,475 at 9:32 a.m. in Sao Paulo. The real climbed 0.2 percent to 2.2417 per dollar. Consumer prices as measured by the IPCA index will rise 5.75 percent this year, down from a forecast of 5.80 percent a week earlier, according to a central bank survey released today.

“The latest data available suggest that inflation is slowing down a bit,” Gustavo Mendonca, who helps manage 1 billion reais as an economist at Saga Capital, said by phone from Rio de Janeiro. “It’s still a matter of concern for sure, but a bit less than it was.”

The Ibovespa slumped 22 percent this year through July 19, wiping out $236 billion from the value of Brazilian equities, according to data compiled by Bloomberg. Brazil’s main equity gauge trades at 11.8 times analysts’ earnings estimates for the next four quarters, compared with 10.3 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 4.37 billion reais on July 19, which compares with a daily average of 7.77 billion reais this year through July 18, 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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