Bovespa stock-index futures rose, a sign that Brazil’s benchmark equity gauge may rebound from its lowest level in nine months.
Steel manufacturer Gerdau SA may be active as Citigroup Inc. raised its recommendation on the stock to buy. Vale SA, the world’s third-largest mining company, may move after posting iron-ore production that missed analysts’ estimates for the first time in four quarters.
Bovespa-index futures contracts expiring in June added 0.6 percent to 53,400 at 9:05 a.m. in Sao Paulo. The real weakened 0.4 percent to 2.0093 per dollar. The Standard & Poor’s GSCI index of 24 raw materials jumped 0.8 percent. The Bovespa stock index yesterday plunged 2.1 percent to the lowest level since July 25 after commodity prices pushed Brazilian producers lower and the International Monetary Fund cut its forecast for global growth.
Brazil’s central bank yesterday raised its benchmark interest rate for the first time since July 2011, seeking to slow inflation levels jeopardizing an economic recovery. The bank’s board, led by President Alexandre Tombini, voted 6-to-2 to increase the Selic rate 25 basis points to 7.50 percent from a record low, matching the median forecast from 58 economists surveyed by Bloomberg.
The Bovespa has retreated 17 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 10 percent over the same period.
Brazil’s benchmark equity gauge trades at 11.3 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 jumped to 22.9 billion reais ($11.5 billion) yesterday as Bovespa-index futures contracts expired. That compares with a daily average of 7.7 billion reais this year, according to data compiled by the exchange.