Ibovespa Advances as Banco do Brasil Climbs on Court Outlook

The Ibovespa gained for a second straight day as Banco do Brasil SA rallied after Brazil’s Supreme Court said it may consider delaying a ruling on a $63 billion lawsuit filed against lenders.

Gol Linhas Aereas Inteligentes SA rose after Air France-KLM agreed to pay $52 million for about 1.5 percent of the airline’s preferred shares. Pulp producer Fibria Celulose SA led a decline in raw-material exporters after manufacturing shrank more than estimated in China, Brazil’s top trading partner.

The Ibovespa gained 0.3 percent to 47,288.61 at the close of trading in Sao Paulo. Forty-four stocks rose on the measure and 28 dropped. The real appreciated 0.9 percent to 2.3723 per U.S. dollar at 5:18 p.m. local time. Banco do Brasil added 4.1 percent to 20.45 reais, contributing most to the gauge’s advance, on the prospect of lenders prevailing in a legal case.

“The longer it takes for the Supreme Court to rule on the case, the more time banks and the government will have to try to pressure judges to rule in favor of the banks,” Fernando Goes, an analyst at Clear Corretora in Sao Paulo, said by phone.

The Supreme Court said it would probably consider today postponing a ruling on lawsuits brought by depositors seeking reimbursement for losses stemming from government policies adopted to fight hyperinflation in the 1980s and 1990s.

The central bank estimates lenders would have to pay 149 billion reais if the court rules in favor of the depositors. Brazil’s then cabinet chief Gleisi Hoffmann said in an Nov. 26 interview that the Supreme Court should be “sensible” when ruling on the case, as “this wouldn’t be a loss for the banks, it would be a loss for the country.”

Gol Rally

Banco Santander Brasil SA gained 0.1 percent to 11.47 reais after earlier gaining as much as 1.5 percent. Gol rose 3.7 percent to 11.33 reais.

The Standard & Poor’s GSCI index of 24 raw materials slipped 0.1 percent after a gauge of China’s manufacturing showed a preliminary February reading of 48.3, below the 49.5 forecast by economists surveyed by Bloomberg. A number less than 50 indicates contraction.

Fibria declined 1.2 percent to 26.05 reais. Iron-ore producer Vale SA (VALE5) fell 1 percent to 30.59 reais.

The Ibovespa has tumbled 16 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target 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 today was 5.79 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 6.5 billion reais this year, according to data from the exchange.

To contact the reporters on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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