The Bovespa index gained for a second day as homebuilders rallied amid speculation that Brazilian policy makers may wait longer before raising record-low interest rates, benefiting companies that sell on credit.
MRV Engenharia e Participacoes SA led advances on the BM&FBovespa Real Estate Index, which advanced the most in 12 weeks. Utility AES Tiete SA rallied after its fourth-quarter profit exceeded analysts’ estimates.
The Bovespa rose 0.6 percent to 57,273.88 at the close of trading in Sao Paulo. Forty-four stocks advanced on the measure while 25 dropped. The real climbed 0.5 percent to 1.9728 per dollar.
“The outlook for companies that are linked to domestic consumption is more positive as the economy is expected to grow faster this year than it did in 2012,” Fernando Goes, an analyst at Sao Paulo-based brokerage Clear Corretora, said in a telephone interview.
Most swap rates dropped after the Getulio Vargas Foundation reported that the IGP-M price index of wholesale, consumer and construction costs rose 0.29 percent this month, compared with the 0.34 percent median forecast of economists. Policy makers cut borrowing costs 5.25 percentage points since August 2011 to 7.25 percent to stoke growth forecast by economists surveyed by Bloomberg to be 3.5 percent this year after a 1 percent expansion in 2012.
AES Tiete advanced 2 percent to 20.60 reais. MRV strengthened 6.6 percent to 12.69 reais.
Eletropaulo Metropolitana SA, the power utility serving the state of Sao Paulo, slumped 5.9 percent to 11.90 reais after posting an adjusted net loss of 24.1 million reais in the fourth quarter, according to data compiled by Bloomberg.
Results were “very weak” and signal that the company may breach debt covenants in the first quarter, Banco Santander SA’s analysts Marcio Prado and Maria Carolina Carneiro wrote in a research note.
Dental-plan provider Odontoprev SA tumbled 4.1 percent to 9.35 reais. The company posted adjusted net income of 27.1 million reais in the fourth quarter, which compares with an average estimate of 42.1 million reais among eight analysts surveyed by Bloomberg.
Seventeen of 27 companies on the Bovespa index that have already reported fourth-quarter earnings missed analysts’ forecasts, according to data compiled by Bloomberg.
Steelmaker Gerdau SA fell 2.4 percent to 16.40 reais, following metals lower. The Bloomberg Base Metals 3-Month Price Commodity Index lost 0.3 percent.
The Bovespa has dropped 9.5 percent from this year’s high on Jan. 3 while the MSCI BRIC Index of shares in Brazil, Russia, India and China has slid 4.1 percent over the same period. Brazil’s benchmark equity gauge trades at 11.7 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume of stocks in Sao Paulo was 7.98 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.51 billion reais this year through Feb. 25, according to data compiled by the exchange.