Ibovespa Snaps Four-Session Drop as Higher Commodities Lift Vale

The Ibovespa advanced, snapping its longest losing streak in two months, as commodity exporters including Vale SA (VALE5) gained as concern eased that growth will slow in China, Brazil’s top trading partner.

Gol Linhas Aereas Inteligentes SA (GOLL4) jumped to the highest level since October after the airline reported that a measure of profitability surged in the fourth quarter. Oil company Petroleo Brasileiro SA (PETR4) contributed the most to the index’s advance as crude gained. MRV Engenharia e Participacoes SA led homebuilders higher as traders pared bets for higher borrowing costs in Brazil.

The Ibovespa climbed 1.6 percent to 49,299.66 at the close of trading in Sao Paulo, with 63 of its 72 members rising. The real dropped 0.6 percent to 2.3738 per dollar at 5:27 p.m. local time. The Standard & Poor’s GSCI index of 24 raw materials added 1 percent. In China, stocks rose and money-market rates slipped after the central bank added more than $42 billion to the financial system.

“There’s a strong correlation between China’s and Brazil’s stock markets because of the commodities trade, and today markets are reacting well to the actions of China’s central bank,” Hamilton Moreira, an analyst at Banco do Brasil SA’s investment banking unit, said by phone from Sao Paulo.

Vale advanced 1.5 percent to 28.91 reais. Bradespar SA (BRAP4), Banco Bradesco SA’s unit that’s part of the group that controls Vale, rose 1.8 percent to 21.49 reais, the biggest one-day gain since Dec. 19.

Commodity producers account for 34 percent of the Ibovespa’s weighting, according to data compiled by Bloomberg.

Gol Rallies

Gol rallied 8.2 percent to 11.47 reais. The airline said in a regulatory filing that net passenger income per available seat-kilometer, a measure of profitability known as Prask, increased 24 percent in the fourth quarter from the same period in 2012.

Auto-parts maker Randon SA Implementos e Participacoes rose 3.1 percent to 10.38 reais after JPMorgan Chase & Co. raised it to the equivalent of buy.

MRV increased 7.8 percent to 8.98 reais. Swap rates, a gauge of expectations for interest-rate moves, rose on most contracts after a report from the Labor Ministry yesterday showed Brazil created last year the fewest jobs since 2003, spurring speculation that policy makers will limit interest-rate increases to support the economy.

Retailer Via Varejo SA (VVAR11) rose 3.8 percent to 24.90 reais after JPMorgan and Credit Suisse Group AG both rated the stock the equivalent of buy in new coverage. Cia. Siderurgica Nacional SA lost 1.7 percent to 12.45 reais as metal prices declined. The Bloomberg Base Metals 3-Month Price Commodity Index fell 0.6 percent.

The Ibovespa has tumbled 13 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target for a third consecutive year and concern mounted that higher government spending will lead to a reduction in the country’s credit rating.

Trading volume of stocks in Sao Paulo was 6.6 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.18 billion reais this month, according to data 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: Brendan Walsh at bwalsh8@bloomberg.net

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