Ibovespa Futures Rise as Metal Gains Boost Brazil Export Outlook

Ibovespa futures advanced, a sign that Brazil’s equity benchmark may rise for a third day, as concern eased that Europe’s economy is faltering, bolstering the outlook for raw-material producers.

Embraer SA (EMBR3) may be active after JPMorgan Chase & Co. raised its recommendation on the plane builder to the equivalent of hold. Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, may move after reporting second-quarter profit that exceeded analysts’ forecasts.

Ibovespa futures contracts expiring in August rose 0.6 percent to 49,000 at 9:26 a.m. in Sao Paulo. The real declined 0.3 percent to 2.2199 per dollar. The Bloomberg Base Metals 3-Month Price Commodity Index added 0.9 percent as a manufacturing index based on a survey of purchasing managers in the euro area increased to 50.1 from 48.8 in June, according to Markit Economics. That compared with the median estimate of 49.1 among economists surveyed by Bloomberg.

“Today’s readings confirm that normalization is under way” in Europe, Barclays Plc analyst Apolline Menut wrote in a research note to clients.

Commodities producers account for about 38 percent of the Ibovespa’s weighting.

Brazil’s benchmark equity gauge slumped 20 percent this year through yesterday, wiping out $205 billion from the value of Brazilian equities, according to data compiled by Bloomberg. The Ibovespa trades at 12.3 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 5.6 billion reais yesterday, which compares with a daily average of 7.7 billion reais this year through July 22, 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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