The Ibovespa advanced the most among major equity benchmarks in the Americas as better-than-expected results from companies including poultry exporter BRF SA spurred optimism about the outlook for earnings.
Embraer SA gained even after reporting an earnings miss as the plane maker said it will sell jets valued at $840 million to United Continental Holdings Inc., the world’s largest airline. JBS SA, the world’s largest beef producer, rose the most in since September.
The Ibovespa climbed 1.9 percent to 55,910.37 at the close of trading in Sao Paulo, paring this month’s drop to 0.8 percent. The Standard & Poor’s 500 Index added 0.3 percent today, and Mexico’s IPC index advanced 0.8 percent. Brazil’s real rose 0.3 percent to 2.0013 per dollar.
“Companies such as BRF reported good figures, which is making investors more optimistic about equities,” Henrique Kleine, the head analyst at Magliano SA brokerage, said by phone from Sao Paulo. “The latest earnings reports could be signaling that companies are doing better this year, and maybe in 2013 things will be better than they were last year.”
Half of the 18 companies on the Ibovespa that have already reported first-quarter earnings beat estimates, including oil producer Petroleo Brasileiro SA and mining company Vale SA, the heaviest-weighted stocks on the gauge, data compiled by Bloomberg show.
BRF posted net income of 358.5 million reais in the first quarter, which compares with an average estimate among analysts of 277.9 million reais, data compiled by Bloomberg show. Shares jumped 3.3 percent to 49.50 reais, the highest since the stock started trading in 1997.
Stock prices were reflecting a scenario of weak growth for the Brazilian economy, and they may rebound if the recovery picks up, said Fernando Goes, an analyst at Sao Paulo-based brokerage Clear Corretora.
“There’s room for a rebound in the short term,” Goes said in a phone interview. “You just have to be cautious. Investors still worry about increasing government intervention in the market.”
Embraer jumped 6.6 percent to 17.51 reais. The Sao Jose dos Campos, Brazil-based company will start delivering 76-seat E-175 jets to United in 2014, according to the airline.
JBS jumped 7 percent to 6.39 reais.
The Ibovespa trades at 11.5 times analysts’ earnings estimates for the next four quarters, compared with 10.7 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 9.7 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.66 billion reais this year through April 26, according to data compiled by the exchange.