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Bovespa Snaps Four-Day Drop on Brazil Optimism, Commodities Gain

March 26 (Bloomberg) -- The Bovespa index snapped a four-day decline as consumer goods climbed after a report showed Brazil’s economy contracted less than forecast and raw-materials producers followed commodities prices higher.

Iron-ore producer Vale SA and oil company Petroleo Brasileiro SA contributed the most to the gauge’s advance. Cia. Hering, the Brazilian apparel retailer, led gains by companies that depend on domestic demand as the MSCI Brazil/Consumer Discretionary Index rose for the second day.

The Bovespa jumped 1.3 percent to 66,684.59 at the close of trading in Sao Paulo. Sixty-one stocks advanced on the index while eight fell. The real weakened 0.4 percent to 1.8172 per U.S. dollar.

“The latest data in Brazil point to stronger economic activity, which is positive, but we still need more information before revising growth forecasts up,” Fausto Gouveia, who helps manage 380 million reais ($209.7 million) at Legan Administracao de Recursos, said by phone from Sao Paulo.

Brazil’s seasonally adjusted economic activity index, a proxy for gross domestic product, fell 0.13 percent in January from December, the central bank said in a report today. Economists had expected a contraction of 0.5 percent, according to the median forecast of 26 analysts surveyed by Bloomberg.

Reports from the national statistics agency last week showed Brazil’s unemployment rate increased less than forecast in February and retail sales exceeded estimates in January. A central bank survey published today showed analysts covering Brazil cut their 2012 economic growth forecast to 3.23 percent this year, from 3.3 percent forecast in the previous six weeks.

Commodities Gain

Global stocks and commodities advanced after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed. The Standard & Poor’s GSCI index of 24 raw materials climbed 0.3 percent and the MSCI All-Country World Index gained 1 percent.

Vale rose 1.2 percent to 41 reais. Petrobras, as Petroleo Brasileiro is known, added 2.2 percent to 24.21 reais.

Hering climbed 5.1 percent to 49.40 reais, the second-best performer on the Bovespa index.

Gol Linhas Aereas Inteligentes SA, Brazil’s second-biggest airline by market value, sank 3.8 percent to 12.81 reais. Barclays Capital lowered its recommendation to the equivalent of hold on concern higher oil prices may hurt profit, analysts including Daniel Spilberg wrote in a note to clients.

Marfrig, Suzano Earnings

Marfrig Alimentos SA, Latin America’s second-largest beef producer, rose 5.2 percent to 11.23 reais, the biggest gain on the Bovespa. The company reported earnings before interest taxes, depreciation and amortization of 521.2 million reais in the fourth quarter, according to a regulatory filing. That compares with an average estimate of 464.5 million reais among eight analysts surveyed by Bloomberg.

Suzano Papel & Celulose SA, Latin America’s second-largest pulp maker, advanced 1 percent to 8.25 reais after reporting fourth-quarter net income of 208.1 million reais. It was expected to report a net loss of 22.4 million reais, according to the average estimate of seven analysts surveyed by Bloomberg.

Brazil’s benchmark equity measure has advanced 17 percent this year, heading to its biggest quarterly gain since the period ended September 2009. Stocks were buoyed by interest-rate cuts in Latin America’s largest economy, signs of growth in the U.S. and speculation Europe may be closer to solving its debt crisis.

The Bovespa trades at 10.8 times analysts’ earnings estimates, which compares with a 10.6 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

Traders moved 5.29 billion reais in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average of 7.19 billion reais this year through March 16, according to data from the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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