Ibovespa Rises as Earnings Outweigh Brazil Credit Rating Concern

The Ibovespa (IBOV) gained for a third day as stronger-than-forecast quarterly results from companies including retailer Lojas Renner SA outweighed concern that Brazil’s credit rating will be cut.

Banco Bradesco SA rose to a four-week high, contributing the most to the benchmark index’s gain. Renner climbed after reporting fourth-quarter sales that exceeded analysts’ estimates. Insurer Qualicorp SA sank the most on the gauge.

The Ibovespa rose 0.2 percent to 47,381.36 at 11:48 a.m. in Sao Paulo, paring this week’s drop to 1.7 percent. Sixteen of the 26 Ibovespa members that have reported fourth-quarter results have exceeded analysts’ earnings estimates, according to data compiled by Bloomberg. The real gained 0.6 percent to 2.3569 per U.S. dollar a day after the government said it’s reducing spending to meet a budget target.

“There’s some good corporate news, some stocks rising after excessive losses, but nothing has changed,” Ari Santos, an equity trading manager at H. Commcor, said by phone from Sao Paulo. “The market is still weak, there’s no consistent rebound. It’s hard to believe the government will deliver on its promises and the rating agencies won’t downgrade Brazil.”

The deterioration in Brazil’s fiscal accounts led Moody’s Investors Service to lower its outlook on the country’s rating to stable from positive in October. Standard & Poor’s assigned a negative outlook in June. The Baa2 rating from Moody’s and equivalent BBB ranking from S&P are the second-lowest investment grades.

Banco Bradesco gained 1.3 percent to 27.05 reais. Renner climbed 2.2 percent to 56.30 reais. Qualicorp declined 1.8 percent to 19.62 reais.

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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