The Ibovespa rose the most in one week as oil company Petroleo Brasileiro SA, the heaviest-weighted stock on Brazil’s benchmark gauge, soared after posting earnings that beat analysts’ estimates.
Petrobras’s results prompted Bank of America Corp. to recommend buying the stock. The MSCI Brazil/Energy index was the best performer among 10 industry groups. Smiles SA, the frequent-flier unit for airline Gol Linhas Aereas Inteligentes SA, surged in its first day of trading following an initial public offering last week.
The Ibovespa gained 1.2 percent to 54,887.25 at the close of trading in Sao Paulo, paring this year’s drop to 10 percent, the steepest decline among major emerging markets. Thirty-eight stocks advanced on the index today while 28 retreated. The real weakened 0.4 percent to 2.0073 per dollar.
“The Brazilian stock market is one of the worst performers in the world this year, partially because companies such as Petrobras are facing some serious issues, and today we’re seeing a rebound,” Alexandre Ghirghi, a portfolio manager at Metodo Investimentos, said by phone from Sao Paulo. “The Ibovespa has potential to gain further if we also see some good news on the macro front. The focus now is on inflation.”
Consumer stocks including cosmetics maker Natura Cosmeticos SA gained after a measure of inflation slowed more than forecast. The IGP-M price index of wholesale, construction and consumer prices rose 7.30 percent in the year ending on April 20, according to the Getulio Vargas Foundation. That was less than the median estimate of 7.35 percent among economists surveyed by Bloomberg.
Natura added 2 percent to 49.09 reais.
Petrobras reported first-quarter net income of 7.69 billion reais, or 59 centavos a share, more than the 57-centavo average of 11 analysts’ estimates, according to data compiled by Bloomberg. Shares jumped 5.5 percent to 20.35 reais.
“Petrobras’s results should be an important factor to help boost investors’ sentiment toward the stock,” Oswaldo Telles, a Sao Paulo-based analyst at Banco Espirito Santo de Investimento SA, wrote in a note to clients today.
Iron-ore producer Vale SA rose 1.1 percent to 32.02 reais, while competitor MMX Mineracao & Metalicos SA jumped 8.2 percent to 2.38 reais. Valor Economico reported that the government shelved a plan to raise a mining tax to as much as 6 percent from 3 percent. The newspaper, citing Energy Minister Edison Lobao, said it is now considering an increase to no more than 4 percent.
Lobao’s press office didn’t respond to an e-mail seeking comment about Valor’s report. The Bloomberg Base Metals 3-Month Price Commodity Index added 1 percent as copper advanced amid speculation that efforts by central banks to boost their economies, coupled with signs of improving in the U.S housing market, will underpin demand for industrial metals.
Oil producer OGX Petroleo & Gas Participacoes SA gained 19 percent to 2.17 reais, the biggest one-day jump since September 2008, paring this year’s plunge to 50 percent.
Smiles rallied 6 percent to 23 reais after saying on April 25 it was raising as much as 1.13 billion reais by selling shares for 21.70 reais each in an initial public offering.
BB Seguridade Participacoes SA, Banco do Brasil SA’s insurance unit, declined 2.4 percent to 16.60 reais in its trading debut after raising 8.5 billion reais in the world’s biggest IPO this year. Four companies held initial share offerings in Brazil this month, the most since 2007, raising a combined 11 billion reais, excluding the so-called greenshoe option for underwriters to buy additional shares.
The Ibovespa trades at 11.2 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 9.04 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.67 billion reais this year through April 25, according to data compiled by the exchange.