Ibovespa Climbs to Two-Month High as Builders Offset Petrobras

The Ibovespa climbed to a two-month high as Brookfield Incorporacoes SA led a gain in homebuilders after a report showed slower-than-forecast inflation in Brazil, outweighing losses by commodities producers.

Retailers also advanced as B2W Cia. Digital rose to a two-week high. Voting shares of Petroleo Brasileiro SA, the state-run oil producer, fell the most on the benchmark index as crude sank the most in three weeks amid speculation that the Federal Reserve will scale back stimulus efforts.

The Ibovespa rose 0.3 percent to 56,429.27 at the close of trading in Sao Paulo, erasing a drop of as much as 0.4 percent. Forty stocks advanced while 29 declined. The real fell 0.5 percent to 2.0496 per dollar.

“We’re seeing some positive signs coming from the Brazilian economy, which is one of the reasons why we’re seeing the outlook for equities getting a bit better when compared with what we had two or three months ago,” Rogerio Freitas, a partner at hedge fund Teorica Investimentos, said by phone from Rio de Janeiro.

Homebuilders and retailers advanced after the national statistics agency reported that the IPCA-15 index, a gauge of consumer prices, increased 0.46 percent in the month through mid-May after rising 0.51 percent in the previous period. The median forecast of 35 economists surveyed by Bloomberg was for a 0.49 percent increase. The annual inflation rate fell to 6.46 percent from 6.49 percent at the end of April.

Brookfield added 4.4 percent to 1.90 reais. B2W climbed 4.8 percent to 11.55 reais. A gauge of utility companies gained the most among 10 industry groups, rising to a one-month high.

Petrobras Declines

Voting shares of Petrobras slumped 2.8 percent to 18.84 reais. The Ibovespa pared gains as Fed Chairman Ben S. Bernanke said the central bank could “step down” the pace of asset purchases at the next few meetings if the labor market continues to improve.

“Markets didn’t react well to Bernanke’s remarks,” Joao Pedro Brugger, who helps manage 330 million reais at Leme Investimentos, said by phone from Florianopolis, Brazil. “This issue may weigh on the Ibovespa for some time, but it may not last long. Brazilian equities have underperformed most markets today, so room for further losses may be limited.”

Iron-ore producer Vale SA lost 1.4 percent to 30.94 reais, snapping three days of advances.

Meatpacker Minerva SA dropped 1.8 percent to 10.25 reais, the lowest since Dec. 18, after saying in a regulatory filing that Russia’s health surveillance service suspended beef imports from one of its plants.

Brazil’s benchmark equity gauge has declined 7.4 percent this year amid concern quickening inflation will curb the nation’s economic recovery. The Ibovespa trades at 12.7 times analysts’ earnings estimates for the next four quarters, compared with a multiple of 11 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 8.31 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.75 billion reais this year through May 20, according to data compiled by the exchange.

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