The Ibovespa rose the most among major equity gauges in the Americas after Petroleo Brasileiro SA’s profit exceeded analysts’ forecasts, boosting the outlook for Brazilian corporate earnings.
Petrobras, as the state-controlled oil producer is also known, contributed the most to the index’s advance. Mining company Vale SA rallied for a fourth day. PDG Realty SA Empreendimentos & Participacoes (PDGR3) led a rally by homebuilders. Tobacco company Souza Cruz SA (CRUZ3) gained after JPMorgan Chase & Co. raised its recommendation to the equivalent of buy.
The Ibovespa added 2.5 percent to 51,107.98 at 11:30 a.m. in Sao Paulo. Sixty-nine stocks rose on the index while two fell. The real was little changed at 2.2723 per dollar. Petrobras reported adjusted earnings of 48 centavos per share, compared with an average estimate of 45 centavos among 13 analysts surveyed by Bloomberg.
“Petrobras and Vale’s earnings might be a signal that at least things are not as bad as some people thought,” Fabio Cardoso, a partner at Rio de Janeiro-based equity advisory firm Adinvest Consultoria, said in a phone interview. “The Ibovespa may be capable of sustaining gains for a while from now on.”
Petrobras climbed 3 percent to 17.60 reais. While 19 of 35 companies on the Ibovespa that have already disclosed second-quarter earnings missed estimates, Petrobras and Vale exceeded forecasts. Vale, the world’s largest iron ore producer, reported adjusted earnings of 1.04 reais per share on Aug. 7, compared with an average estimate of 1.02 reais among analysts surveyed by Bloomberg. Its shares gained 1.8 percent to 31.47 reais today.
PDG Realty rose 7.8 percent to 1.94 reais. Competitor Gafisa SA (GFSA3) climbed 5.8 percent to 3.08 reais.
The Ibovespa slumped 18 percent this year through Aug. 9, wiping out $222 billion from the value of Brazilian stocks, according to data compiled by Bloomberg. Brazil’s benchmark equity gauge trades at 12.4 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 of stocks in Sao Paulo was 7.99 billion reais on Aug. 9, compared with a daily average of 7.58 billion reais this year through Aug. 6, according to data compiled by the exchange.
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