The Ibovespa rose as better-than-forecast results from airline Gol Linhas Aereas Inteligentes SA and homebuilder Cyrela Brazil Realty SA Empreendimentos & Participacoes bolstered the outlook for corporate profits.
Beef producer Marfrig Alimentos SA rallied after saying it will sell and close plants and cut debt by as much as 2 billion reais following a second consecutive quarterly loss. Diagnosticos da America SA, Brazil’s biggest provider of medical diagnostics, rose to a one-month high. The MSCI Brazil/Materials Index posted the only decline among 10 industry groups as iron-ore producer Vale SA followed metals lower.
The Ibovespa added 0.4 percent to 54,666.82 at the close of trading in Sao Paulo, its first gain in five days. Forty-three stocks advanced on the gauge while 26 dropped. The real weakened 0.6 percent to 2.0208 per dollar.
“We saw some profit-taking in the past four sessions, but I think the Ibovespa can go higher given the outlook for the companies,” Leandro Martins, the head analyst at brokerage Walpires SA in Sao Paulo, said in a telephone interview. “Many of them seem to be doing well.”
Gol gained 3.3 percent to 12.25 reais. While the airline posted an unexpected adjusted net loss in the first quarter, earnings before interest, taxes, depreciation and amortization exceeded analysts’ estimates.
Cyrela, Brazil’s largest homebuilder by sales, rose 4.5 percent to 18.07 reais. The company posted adjusted net income of 179 million reais in the first quarter, more than the average analyst estimate of 172.6 million reais, according to data compiled by Bloomberg.
Twenty-nine of the 51 companies on the Ibovespa that have already reported first-quarter earnings missed analyst estimates, according to data compiled by Bloomberg.
Marfrig surged 13 percent to 7.45 reais. Dasa, as Diagnosticos da America is also known, gained 4.7 percent to 12 reais.
The Ibovespa earlier fell as much as 0.2 percent as Vale followed metals lower amid signs that growth is slowing in China, Brazil’s biggest trading partner. The Bloomberg Base Metals 3-Month Price Commodity Index lost 1.4 percent as JPMorgan Chase & Co. cut its forecast for China’s growth this year to 7.6 percent from 7.8 percent.
“Economic data in China have been worse than expected, which surely affects companies such as Vale,” Larissa Gatti Nappo, an economist at brokerage Souza Barros in Sao Paulo, said by telephone. “That’s something to be watching closely. Any number in China that’s slightly worse has a big impact over Brazilian equities.”
Vale retreated 2.4 percent to 31.07 reais.
Brazil’s benchmark equity gauge has lost 10 percent this year, the worst performer among 19 major emerging markets, according to data compiled by Bloomberg. The Ibovespa trades at 12 times analysts’ earnings estimates for the next four quarters, compared with 10.9 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 8.22 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.71 billion reais this year through April 30, according to data compiled by the exchange.