Ibovespa Gains Most in World as Economic Growth Beats Estimates

The Ibovespa (IBOV) climbed the most among the world’s biggest equity indexes after Brazil’s economic growth beat forecasts and the central bank signaled interest-rate increases are ending.

Vale SA (VALE), the world’s largest iron-ore producer, posted the biggest gain in two weeks after reporting profit that exceeded estimates. MMX Mineracao & Metalicos SA rallied after selling control of a port. Pulp producer Fibria Celulose SA fell the most among raw-materials exporters as the currency strengthened.

The Ibovespa added 2.2 percent to 47,606.75 at the close of trading in Sao Paulo, the biggest gain since Feb. 6. Sixty-seven stocks climbed and five dropped. The real rose 1.2 percent to 2.3225 per dollar at 5:20 p.m local time. Swap rates, a gauge of bets on borrowing costs, fell after policy makers raised the benchmark lending rate by a quarter-percentage point to 10.75 percent yesterday after six increases of 0.5 percentage point.

“The outlook for the economy has improved today with the good news,” Fernando Goes, an analyst at the brokerage firm Clear Corretora, said in a phone interview from Sao Paulo. “The market had priced in very negative prospects for the companies, so now there is room for a rebound.”

Brazil’s economy expanded 0.7 percent in the three months though December, the national statistics bureau reported today. The median forecast from 49 economists surveyed by Bloomberg was for a 0.3 percent increase.

Homebuilder Rossi Residencial SA led gains on the benchmark gauge, climbing 8.5 percent to 1.79 reais.

Vale, the heaviest-weighted stock on the Ibovespa, advanced 1 percent to 29.31 reais, the biggest one-day increase since Feb. 11. The Rio de Janeiro-based company said yesterday earnings before interest, taxes, depreciation and amortization, or adjusted Ebitda, rose to $6.64 billion, beating a $5.9 billion average estimate of 17 analysts compiled by Bloomberg.

Trading Volume

MMX rallied 5.3 percent to 3.19 reais. Former billionaire Eike Batista’s mining company concluded the sale of Porto Sudeste, an iron-ore port, to Trafigura Beheer BV and Mubadala Development Co. for $400 million in investments and about 1.3 billion reais in debt, according to a regulatory filing today.

Fibria fell 0.9 percent to 25.16 reais. The company gets about 90 percent of its revenue from exports, according to a statement on Fibria’s website.

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 5.5 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 6.4 billion reais this year, according to data from the exchange.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

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

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