The Ibovespa posted its biggest monthly gain this year as pulp maker Suzano Papel e Celulose SA led commodities exporters higher after a plunge in Brazil’s currency boosted the outlook for overseas sales.
Iron-ore producer Vale SA contributed most to the benchmark’s gain today. Itau Unibanco Holding SA, Latin America’s biggest bank by market value, rose a third day. Brookfield Incorporacoes SA led declines in homebuilders on speculation that faster-than-forecast economic growth will spur policy makers to keep increasing interest rates. Eike Batista’s OGX Petroleo & Gas Participacoes SA plunged 40 percent to a record low 30 centavos in the last minutes of trading.
The Ibovespa climbed 0.2 percent 50,008.38 at the close of trading in Sao Paulo, with 46 stocks on the 71-member index advancing. The gauge fell 4.2 percent this week, paring this month’s advance to 3.7 percent. The real dropped 1.1 percent to 2.3855 per dollar.
“In the short term, a weaker currency will help the Ibovespa, given the boost it gives to exporters,” Otavio Vieira, a partner at hedge fund Fides Asset Management in Rio de Janeiro, said in a telephone interview. “Looking forward, we’ll have to keep a close watch on the impact this weaker real will have on inflation and growth.”
Brazil’s gross domestic product grew 1.5 percent in the second quarter from the previous three-month period, the national statistics agency said today. Economists surveyed by Bloomberg had forecast an expansion of 0.9 percent. Swap rates, a gauge of expectations for interest-rate moves, increased on most contracts after the GDP report was released.
The real weakened 4.6 percent this month as speculation deepened that U.S. policy makers will curb stimulus that stoked demand for emerging-market assets.
Suzano, which gets half of its revenue outside Brasil, rose 3 percent to 9.40 reais, extending this month’s rally to 21 percent. Larger competitor Klabin SA climbed 1.4 percent to 12.31 reais today.
Itau added 1.9 percent to 29 reais. Vale climbed 1 percent to 31.10 reais.
Brazilian Swap rates on most contracts rose after the national statistics agency said gross domestic product expanded 1.5 percent in the second quarter, more than the 0.9 percent economists surveyed by Bloomberg had projected.
“I don’t think the outlook for the Brazilian economy will support equities,” Otavio Vieira, a partner at hedge fund Fides Asset Management in Rio de Janeiro, said in a telephone interview. “GDP growth in the second quarter was somewhat positive, but that’s partially explained by the fact that the previous quarters were terrible. Interest rates rising make credit more expensive, and a weaker currency, while good for exporters, puts pressure on costs for all other companies.”
Brookfield fell 2.9 percent to 1.70 reais.
The worst is over for Brazil, Finance Minister Guido Mantega told reporters today in Sao Paulo. He reiterated the government’s 2.5 percent growth forecast for 2013, adding that second-quarter expansion won’t pressure inflation.
The Ibovespa has gained 11 percent from this year’s low on July 3 as higher commodities prices and a weaker real fueled a rally in raw-material exporters. Brazil’s benchmark gauge climbed 5.6 percent in dollar terms during the period, compared with an advance of 19 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume of stocks in Sao Paulo was 9.92 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.75 billion reais this year through Aug. 27, according to data compiled by the exchange.