The Bovespa index rebounded from a six-week low as a report showing consumer prices declined more than forecast in Brazil’s biggest city eased concern that accelerating inflation will sap the economic recovery.
Homebuilder Rossi Residencial SA was the best performer on the gauge, while competitors Gafisa SA and Cyrela Brazil Realty SA Empreendimentos & Participacoes also advanced. Mining company MMX Mineracao & Metalicos SA sank to the lowest since October 2008 as commodities prices dropped.
Brazil’s benchmark equity index rose 1.2 percent to 55,562.74 at the close of trading in Sao Paulo, paring this year’s slump to 8.8 percent. Forty-two stocks gained as 23 fell. The real lost 0.2 percent to 2.0243 per dollar. The Standard & Poor’s GSCI index of 24 raw materials slid 2 percent.
“Stock prices have fallen quite a lot, so if we start to see more figures showing growth is picking up and inflation is slowing, there should be room for a strong rebound,” Alvaro Bandeira, a partner at Orama Asset Management, said by phone from Rio de Janeiro.
Consumer prices as measured by the IPC-Fipe index in Sao Paulo dropped 0.17 percent last month after rising 0.22 percent in February, a report today from the Foundation Economics Research Institute showed. That compares with a median estimate for a decline of 0.15 percent from 15 economists surveyed by Bloomberg.
Gafisa jumped 6.7 percent to 4 reais, the biggest one-day rally since Feb. 22. Valor Economico reported today that the company has received four offers to acquire its Alphaville Urbanismo subsidiary that valued the unit at as high as 1.9 billion reais. The newspaper didn’t say where it got the information. Gafisa declined to comment when contacted by Bloomberg News.
Rossi rose 9.4 percent to 3.39 reais, the biggest gain since May 2010. Cyrela advanced 2.2 percent to 17.47 reais.
Companies that depend more on domestic consumption have better chances to outperform the overall market as they are less exposed to government intervention, said Marcio Cardoso, a partner at brokerage Titulo Corretora de Valores SA.
“You can tell that investors are interested in Brazilian equities, but that doesn’t mean that all stocks on the Bovespa index will gain,” Cardoso said in a phone interview from Sao Paulo.
Foreign investors have poured 8.86 billion reais into Latin America’s largest equity market this year through April 1, according to data compiled by Bloomberg.
Iron-ore producer Vale SA jumped 5.8 percent to 33.70 reais, rebounding from a 2009 low and paring this year’s loss to 17 percent.
MMX fell 3.8 percent to 2.05 reais. Commodities declined as separate reports showed private payrolls and services-industry growth in the U.S. trailed economists’ estimates, adding to concern that the recovery may falter in Brazil’s second-largest trading partner.
The Bovespa has retreated 13 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index of shares in Brazil, Russia, India and China has lost 7.5 percent over the same period.
Brazil’s benchmark equity gauge trades at 11 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 for stocks in Sao Paulo was 7.53 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.47 billion reais this year through April 1, according to data compiled by the exchange.