The Ibovespa climbed for the first time in three sessions as higher pulp prices boosted Brazilian producers including Suzano Papel & Celulose SA, outweighing losses by homebuilders.
OGX Petroleo & Gas Participacoes SA, the oil company controlled by the billionaire Eike Batista, led gains on the benchmark stock index after slumping 15 percent yesterday. Iron-ore producer Vale SA rose to a one-week high.
The Ibovespa added 0.8 percent to 49,464.94 at the close of trading. The real weakened 0.5 percent to 2.1816 per dollar at 5:48 p.m. in Sao Paulo even after the central bank intervened to strengthen the currency. Average pulp prices reached $820.91 per ton in the week ended June 18, the highest since the end of August 2011, according to Helsinki-based FOEX Indexes Ltd.’s BHKP global pulp price index.
“The outlook for pulp prices is positive,” Pedro Galdi, the chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a phone interview. “And exporters such as Suzano benefit from a weaker real, so investors are also taking that into account now.”
Suzano jumped 4.6 percent to 7.79 reais. Fibria Celulose SA added 3.8 percent to 23.80 reais. OGX advanced 12 percent to 92 centavos.
The Ibovespa dropped as much as 1.4 percent earlier today after the Getulio Vargas Foundation reported that the IGP-M price index of wholesale, construction and consumer prices increased 0.74 percent in the 20 days starting May 21. That was more than the median forecast of 0.65 percent among economists surveyed by Bloomberg.
“There seem to be too many imbalances in the Brazilian economy, with high inflation, slow growth and a weak currency,” Luciano Rostagno, the chief strategist at Banco WestLB do Brasil SA, said by phone from Sao Paulo. “It’s driving people away from equities.”
Homebuilder MRV Engenharia e Participacoes SA dropped 2.7 percent to 6.78 reais. Rossi Residencial SA slipped 2.5 percent to 3.19 reais.
Votorantim Cimentos SA, Brazil’s biggest cement producer, suspended an initial public offering of as much as $3.7 billion, according to two people familiar with the decision who asked not to be named because the decision hasn’t been officially announced yet. The company was scheduled to price the shares on June 20.
Votorantim’s IPO is the first to be postponed or canceled in the world’s second-largest emerging market this year. Its press office in Sao Paulo declined to comment.
Brazil’s benchmark equity gauge plunged into a bear market last week after falling more than 20 percent from this year’s peak in January on concern that accelerating inflation will limit the central bank’s ability to spur growth.
The Ibovespa trades at 11.9 times analysts’ earnings estimates for the next four quarters, compared with a multiple of 10.2 for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume for stocks in Sao Paulo was 6.76 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.85 billion reais this year through June 14, according to data from the exchange.