The Bovespa stock index advanced for the first time in four days amid speculation that recent declines may have been excessive given the prospects for economic growth in Brazil.
Oil companies OGX Petroleo & Gas Participacoes SA and Petroleo Brasileiro SA advanced as crude rose.
The Bovespa climbed 0.4 percent to 59,163.95 at 10:35 a.m. in Sao Paulo after falling 2.3 percent in the three previous sessions. Forty-one stocks rose on the gauge today while 26 declined. The real appreciated 0.3 percent to 1.9856 per U.S. dollar. The Standard & Poor’s GSCI index of 24 raw materials climbed 0.4 percent.
“While there are some concerns about the state of the Brazilian economy, the losses of the past few days were a bit exaggerated,” Joao Pedro Brugger, who helps oversee 220 million reais at Leme Investimentos Ltda. in Florianopolis, Brazil, said in a phone interview. “We’ll probably see the economy growing at a faster pace this year, and that should help equities to post a better performance.”
Gross domestic product will grow 3.1 percent in 2013, according to the median forecast of economists in a central bank survey published this week. The bank estimates 1 percent expansion last year. Consumer prices as measured by the IPCA index rose 0.86 percent in January, the fastest pace in almost eight years, the government reported today.
OGX climbed 1.6 percent to 3.77 reais. Petrobras, as Petroleo Brasileiro is known, added 1.2 percent to 17.81 reais.
The Bovespa entered a bull market on Jan. 3 after rising 21 percent from last year’s low on June 5 as stimulus from central banks around the world eased concern that economic growth might miss expectations while borrowing costs at a record low in Brazil boosted equity demand. The index has since pared its advance to 13 percent.
Brazil’s benchmark equity gauge trades at 10.9 times analysts’ earnings estimates for the next four quarters, compared with 9.7 for MSCI’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 7.17 billion reais yesterday, compared with a daily average of 7.36 billion reais this year through Feb. 5, according to data compiled by the exchange.