Ibovespa Futures Advance on Brazilian Central Bank Rate Signal

Ibovespa futures climbed, following the equity gauge’s second straight decline, after Brazilian policy makers signaled they may stop raising borrowing costs, boosting the outlook for stocks.

Homebuilder Direcional Engenharia SA may move as sales jumped 66 percent in the first quarter from the same period last year. Drugstore chain Brasil Pharma SA may be active after saying it plans to raise as much as 400 million reais in a share sale.

Ibovespa futures contracts due this month rose 0.5 percent to 51,480 at 9:46 a.m. in Sao Paulo. The real weakened 0.6 percent to 2.2013 per U.S. dollar. Swap rates, a gauge of expectations for interest-rate moves, fell on most contracts after Brazil’s central bank said in minutes of its last monetary policy committee meeting that the effects of recent rate increases have yet to be felt.

The central bank voted unanimously this month to raise the benchmark Selic rate to 11 percent from 10.75 percent. Policy makers said inflation remains persistent and predicted the recent jump in food prices will be temporary, according to the minutes of the April 1-2 meeting released today.

Brazil’s benchmark equity gauge entered a bear market March 14 after falling 20 percent from its October high through that day. The gauge has since gained 14 percent as state-owned companies including Centrais Eletricas Brasileiras SA (ELET6) rebounded.

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

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Richard Richtmyer, Dennis Fitzgerald

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