Ibovespa Rises Most in a Week as Vale Rallies on Export Outlook

The Ibovespa climbed the most in a week as Vale SA (VALE5) rallied amid signs that growth is accelerating in China, the mining company’s top export market.

Duratex SA, a maker of wood panels and metal fixtures including faucets, was the best performer on the MSCI Brazil/Materials Index, which rose to the highest since May. Meatpacker Minerva SA climbed to a one-month high after agreeing to buy two beef plants from BRF SA (BRFS3), which will hold a 15 percent stake in the company once the deal is completed.

The Ibovespa gained 0.8 percent to 54,436.92 at the close of trading in Sao Paulo, with 39 stocks higher and 30 lower. The real climbed 0.3 percent to 2.2465 per dollar at 6:12 p.m. local time. In China, a purchasing managers’ index increased in October to the highest level this year.

“The Ibovespa could rise to 60,000 by the end of the year,” Pedro Galdi, the head strategist at SLW Corretora in Sao Paulo, said in a telephone interview. “There are signs that the global economy is improving, and equities should respond to that. Demand in China remains strong, which bolsters stocks such as Vale.”

Vale contributed the most to the benchmark gauge’s advance, gaining 2.3 percent to 34.22 reais, the highest since March. Bradespar SA, Banco Bradesco SA’s investment unit and part of Vale’s controlling group, rose 2 percent to 26.58 reais. China’s non-manufacturing PMI increased to 56.3 in October from 55.4 in September, the country’s National Bureau of Statistics and its Federation of Logistics and Purchasing said. A number above 50 indicates expansion.

Minerva Acquisition

Minerva advanced 2 percent to 10.10 reais. The plants acquired from BRF are in Mato Grosso, which processes more cattle than any other Brazilian state, according to data compiled by Abiec, the Brazilian meat exporters’ association.

Embraer SA (EMBR3) sank 1.3 percent to 16.53 reais after the Wall Street Journal reported that the plane builder is being investigated in the U.S. and Brazil for allegedly bribing Dominican Republic officials to win a $90 million contract. Embraer said in e-mailed statement to Bloomberg News that it requires employees to comply with laws and it has been cooperating fully with authorities.

Hypermarcas SA (HYPE3), a manufacturer of consumer products including diapers and generic drugs, added 1.4 percent to 19.91 reais after its third-quarter profit exceeded analysts’ estimates. The company posted adjusted net income of 79.6 million reais, which compares with an average estimate of 71 million reais, according to data compiled by Bloomberg.

Duratex gained 3.5 percent to 14.07 reais.

Bull Market

EZ Tec Empreendimentos e Participacoes SA lost 1.3 percent to 31.51 reais after Banco Santander SA cut its recommendation on the homebuilder to hold.

Brazil’s benchmark stock index entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3. The gauge is still down 19 percent in dollar terms this year, compared with a decline of 2.7 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo was 6.14 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.61 billion reais this year through Oct. 22, according to the latest data available from 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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