Bovespa Gains as European Debt Concern Eases, Hypermarcas Surges

The Bovespa gained for the first time in three days as Germany’s chancellor signaled cooperation with France’s president-elect to solve Europe’s debt crisis and Hypermarcas SA surged after first-quarter sales and profit rose.

Hypermarcas, the Brazilian maker of more than 190 consumer products, rallied the most since March. OGX Petroleo & Gas Participacoes SA contributed most to the gauge’s advance after Petroleo Brasileiro SA’s chief executive officer said it is in talks with the company for partnerships.

The Bovespa gained 0.7 percent to 61,220.43 at the close of trading in Sao Paulo. Forty-four stocks advanced while 21 fell. The real rose 0.3 percent at 1.9209 per U.S. dollar.

France elected Francois Hollande president, and Greek voters flocked to anti-bailout parties. Hollande, a Socialist, has called for higher taxes, increased spending and a delayed deficit-reduction effort. German Chancellor Angela Merkel, who has championed cost-cutting and supported President Nicolas Sarkozy, said she will receive Hollande “with open arms.”

“Merkel saying Germany will talk with the new French president gave some relief to investors,” Pedro Paulo Silveira, chief economist at TOV Corretora, said by phone from Sao Paulo.

The Bovespa earlier dropped as much as 0.7 percent as Greece’s poll cast doubt on whether the two main parties can put together a government strong enough to implement spending cuts to ensure the flow of bailout funds.

Interest-Rate Futures

In the Brazilian interest-rate futures market, yields on most contracts fell. The yield on the contract due in January 2014 dropped as much as 13 basis points, or 0.13 percentage point, to a record low 8.15 percent. Economists covering Brazil reduced their 2012 year-end target lending rate forecast for the first time in eight weeks, a central bank survey showed.

Hypermarcas advanced 5.8 percent at 12.68 reais. The company said first-quarter profit rose 24 percent to 40.8 million reais ($21.2 million) from a year earlier. The profit missed a 53.9 million-real mean estimate for adjusted net income of eight analysts compiled by Bloomberg.

OGX gained 3 percent to 13.98 reais. Petrobras is in talks with Vale SA and billionaire Eike Batista’s EBX Group for logistics and infrastructure partnerships to cut costs, Chief Executive Officer Maria das Gracas Foster told Brasil Economico in an interview.

Petrobras added 0.5 percent to 20.58 reais. Vale slipped 0.1 percent to 40.39 reais.

Tim Rises

Tim Participacoes SA rose 2.1 percent to 10.72 reais after earlier plunging as much as 6.2 percent. Telecom Italia SpA said Luca Luciani stepped down as chief executive officer of its Brazilian unit, the country’s second-largest wireless operator. Luciani left the company and “gave up all his mandates,” Milan-based Telecom Italia said in a statement May 5. Telecom Italia Chief Financial Officer Andrea Mangoni will replace him on a temporary basis, it said.

Brazil’s benchmark equity measure has gained 7.9 percent in 2012, buoyed by local interest-rate cuts, signs of expansion in the U.S. and speculation Europe may be closer to resolving its sovereign-debt crisis. The Bovespa trades at 10.2 times analysts’ earnings estimates, in line with the 10.4 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume was 6.68 billion reais in stocks in Sao Paulo today, according to data compiled by Bloomberg. That compares with a daily average of 7.23 billion reais this year through May 4, according to data from the exchange.

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