Ibovespa Rises as Brazil Interest-Rate Outlook Buoys Brookfield

The Ibovespa climbed as Brookfield Incorporacoes SA (BISA3) led gains among homebuilders amid speculation slowing inflation will spur the central bank to limit further increases in borrowing costs.

Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, advanced to a two-week high. EZ Tec Empreendimentos e Participacoes SA gained after the real-estate company reported a 30 percent increase in fourth-quarter booked sales from a year earlier. Steelmaker Cia. Siderurgica Nacional SA (CSNA3) followed metal prices lower.

The Ibovespa gained 0.5 percent to 49,531.80 at 11:38 a.m. in Sao Paulo, with 53 of its 72 member stocks higher. Swap rates, a gauge of expectations for interest-rate moves, declined on most contracts after the national statistics agency reported that consumer prices rose 5.63 percent in the 12 months through mid-January, the slowest pace since October 2012.

“Concern about the strength of the Brazilian economy may be a bit overdone, and prices are beginning to look attractive, especially among banks and stocks linked to domestic consumption,” Fernando Goes, an analyst at Clear Corretora in Sao Paulo, said in a phone interview.

The Ibovespa has tumbled 12 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.

Brookfield rallied 5.4 percent to 1.17 reais. Pao de Acucar climbed 2.9 percent to 99.88 reais. CSN, as Cia. Siderurgica is known, lost 0.8 percent to 12.35 reais.

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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