Brazil’s Ibovespa rose for a third day after Federal Reserve Chairman Ben S. Bernanke damped speculation that the U.S. central bank was preparing to end bond purchases that have bolstered emerging-market assets.
Localiza Rent a Car SA, Latin America’s biggest car-rental company, climbed after posting second-quarter earnings that exceeded analysts’ estimates. Consumer-health products manufacturer Hypermarcas SA rose the most since May after Goldman Sachs Group Inc. raised its recommendation to buy.
The Ibovespa advanced 1.1 percent to 47,407.31 at the close of trading in Sao Paulo, paring this year’s slump to 22 percent. The real appreciated 1.3 percent to 2.2258 per dollar at 5:30 p.m. local time. The MSCI All-Country World index added 0.3 percent after Bernanke said today in prepared testimony before the U.S. House Financial Services Committee that the current pace of bond purchases “could be maintained for longer” in case “the outlook for employment were to become relatively less favorable.”
“Investors were too pessimistic about equities, and these remarks from Bernanke help to make things a little better, at least for now,” Rogerio Freitas, a partner at hedge fund Teorica Investimentos, said by phone from Rio de Janeiro.
Localiza added 1.9 percent to 31.60 reais. The company, the first member of the Ibovespa to report second-quarter earnings, said adjusted net income was 103.4 million reais in the April-to-June period, which compared with an average estimate of 87.5 million reais among six analysts surveyed by Bloomberg.
“These results could lead the bears to re-think the negative, kneejerk reaction against the shares simply because interest rates are rising” in Brazil, Citigroup Inc.’s analysts Stephen Trent and Juliano Navarro wrote in a research note to clients.
Localiza has slumped 12 percent this year. Brazilian policy makers raised the benchmark lending rate for a third straight meeting on July 10, bringing it up to 8.5 percent from a record-low 7.25 percent at the start of the year, adding to concern that rising borrowing costs will sap the economic recovery.
Airline Gol Linhas Aereas Inteligentes SA jumped 6.2 percent to 7.87 reais after saying a measure of profitability known as Prask, or average revenue for each seat flown a kilometer, increased 11 percent in June.
Hypermarcas climbed 2.9 percent to 15.90 reais.
The Ibovespa’s slump wiped out $247 billion from the value of Brazilian equities this year through yesterday, according to data compiled by Bloomberg. Brazil’s main equity gauge trades at 12 times analysts’ earnings estimates for the next four quarters, compared with 10.4 for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume for stocks in Sao Paulo was 6.31 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.81 billion reais this year through July 13, according to data compiled by the exchange.