Bovespa Gains Most in 2 Weeks as Europe Optimism Lifts Producers

The Bovespa stock index gained the most in two weeks as speculation European leaders are intensifying efforts to contain the region’s debt crisis lifted commodities and boosted the outlook for Brazilian producers.

Oil producer Petroleo Brasileiro SA and mining company Vale SA, the index’s two heaviest-weighted stocks, followed crude and metals higher. Usinas Siderurgicas de Minas Gerais SA rose after Ternium SA and Tenaris SA agreed to pay 5.03 billion reais ($2.7 billion) for a voting stake in the steelmaker. Cyrela Brazil Realty SA Empreendimentos e Participacoes led gains by homebuilders after Credit Suisse Group AG said Brazilian real estate companies are trading at “attractive” prices. All 10 industry groups on the MSCI Brazil Index climbed.

The Bovespa rose 2 percent to 56,017.35 at the close of Sao Paulo trading. Sixty stocks advanced on the index, while six fell. The real strengthened 2 percent to 1.8548 per U.S. dollar. The Standard & Poor’s GSCI index of 24 raw materials rose 1.4 percent, the biggest gain in a month.

Commodities climbed and global stocks rose after Thanksgiving retail sales in the U.S. jumped to a record and after La Stampa reported the International Monetary Fund is preparing a 600 billion euro ($801 billion) loan for Italy in case the debt crisis worsens. The newspaper didn’t say where it got the information.

“Record-high Black Friday sales in the U.S. and a rumor that the IMF may create a 600 billion-euro credit line to help Italy explain today’s optimism,” Alexandre Ghirghi, who manages about 150 million reais at Metodo Investimentos, said by phone from Sao Paulo. “Many Brazilian stocks are trading at attractive prices, and there’s room for recovery if the external outlook improves.”

Italian Loan

The Washington-based IMF said in an e-mailed statement it isn’t in discussions with Italian authorities on a program for financing.

Retail sales in the U.S. during Thanksgiving weekend rose 16 percent from a year earlier to $52.4 billion, the National Retail Federation said yesterday, citing a survey from BIGresearch.

In Brazil, economists raised their forecast for 2012 inflation for the first time in six weeks, and cut their forecast for economic growth.

Consumer prices will increase 5.56 percent next year, according to the median forecast in a Nov. 25 central bank survey of about 100 economists published today, from a forecast of 5.55 percent the previous week. Consumer prices, as measured by the IPCA index, will rise 6.49 percent this year, from a forecast of 6.48 last week, the survey found.

Policy makers will cut the benchmark Selic rate to 11 percent from 11.5 percent at their meeting scheduled for Nov. 29-30, according to the survey.

Cyrela Rallies

Cyrela, Brazil’s second-biggest homebuilder by revenue, jumped 5.5 percent to 14.67 reais, the most since Aug. 29. Real estate companies are trading at an “attractive valuation,” Credit Suisse analysts including Guilherme Rocha wrote in a note to clients.

Petrobras, as Petroleo Brasileiro is known, gained 2.3 percent to 21.50 reais, and Vale advanced 1.3 percent to 39.50 reais. Crude oil for January delivery on the New York Mercantile Exchange advanced 1.1 percent to $97.86 a barrel.

Preferred shares of Usiminas, as Usinas Siderurgicas is known, increased 2.8 percent to 10.90 reais after earlier rallying 7.2 percent.

The Bovespa entered a bull market in October after gaining 22 percent from a two-year low on Aug. 8 as the rate cuts and speculation Europe was working toward solving its debt crisis buoyed demand for equities. Since then, the index pared its advance to 15 percent.

Trading Volume

Brazil’s benchmark stock gauge trades at 9.9 times analysts’ earnings estimates, in line with the ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

Traders moved 5.3 billion reais in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average this year of 6.54 billion reais through Nov. 21, according to data from the exchange.

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