The Bovespa index advanced as Eike Batista’s mining unit MMX Mineracao & Metalicos SA surged after Valor Economico reported the government is planning to help the Brazilian billionaire’s struggling companies.
MMX gained the most in a month after reversing a decline of 6.3 percent. Oil producer OGX Petroleo & Gas Participacoes SA ended the session 1.8 percent lower after plunging as much as 13 percent. LLX Logistica SA, his port company, ended down 5.4 percent after earlier sinking the most since August 2011. Gol Linhas Aereas Inteligentes SA advanced after the airline said private equity firm General Atlantic LLC planned to invest in the initial public offering of its mileage unit.
The Bovespa gained 0.1 percent to 55,092.31 at the close of trading in Sao Paulo, after falling as much as 1.3 percent. Thirty-seven stocks rose on the measure while 29 declined. The real fell 0.3 percent to 1.9918 per U.S. dollar. Brazil may help Batista’s EBX Group through state-run Petroleo Brasileiro SA, Valor reported without saying where it got the information.
“There’s news the government is in talks with Eike for Petrobras to help in the Acu Port,” Luciano Rostagno, Banco WestLB do Brasil’s chief strategist, said in a telephone interview from Sao Paulo. “The fact that the government might help, I think that’s what caused the Bovespa to flip.”
MMX rose 7.3 percent to 2.06 reais. OGX closed at 1.68 reais. LLX fell ended the session at 1.93 reais. EBX’s press office declined to comment on the Valor report when contacted by phone. Press officials for the presidency, the energy and trade ministries did not respond to requests for comment.
Gol gained 3.5 percent to 11.54 reais, the biggest one-day gain since March 12.
JBS SA, the world’s biggest beef producer, rallied 4.4 percent to 6.69 reais, the most in three weeks, after JPMorgan Chase & Co. raised its recommendation to the equivalent of buy.
“This may be a good time for investors with a six- to 12-month time horizon to take a deeper look at the Brazilian meat sector as valuations are starting to look more attractive,” JPMorgan’s analysts including New-York based Alan Alanis wrote in a note to clients.
JBS trades at 10.5 times its 2013 forecast earnings, according to JPMorgan analysts. That compares with an average ratio of 16.9 for global meat producers covered by the firm.
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 8.9 percent over the same period.
Brazil’s benchmark equity gauge trades at 11 times analysts’ earnings estimates for the next four quarters, compared with 10.3 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 6.47 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.45 billion reais this year through April 4, according to data compiled by the exchange.