The Ibovespa rose the most among the world’s equity benchmarks as OGX Petroleo e Gas Participacoes SA rallied after the company exercised a put option requiring Eike Batista to inject as much as $1 billion into the oil company.
Steelmaker Cia. Siderurgica Nacional SA rose to a five-month high as commodities gained on speculation that the U.S. will limit potential cuts to a stimulus program. Homebuilders including Rossi Residencial SA advanced as traders pared bets for higher borrowing costs in Brazil.
The Ibovespa jumped 2.7 percent to 53,749.42 at the close in Sao Paulo, pushing the five-day gain to 7.5 percent, the steepest weekly advance since October 2011. It earlier climbed to 54,124.87, approaching a bull market after rising 20 percent from its July 3 low. The Standard & Poor’s GSCI index of 24 raw materials rose 1.1 percent after data showed U.S. employers added 169,000 workers last month, compared with the median forecast of 180,000 among economists surveyed by Bloomberg.
“The jobs report in the U.S. made it a bit less likely that the Federal Reserve will start to reduce its bond-buying program, and the Ibovespa is benefiting from that,” Luis Gustavo Pereira, head strategist at Futura Corretora brokerage, said in a phone interview from Sao Paulo. “And there’s OGX, which has a big weighting on the index. The company managed to buy some time with this deal with Eike.”
OGX, the third-heaviest weighted stock on the Ibovespa, jumped 27 percent to 52 centavos, contributing the most to the gauge’s advance. Under terms of the option, Batista would pay 6.3 reais per share, according to a regulatory filing today.
CSN added 0.3 percent to 9.19 reais. The real strengthened 0.8 percent to 2.3070 per dollar at 5:30 p.m. local time, paring the drop in the last three months to 7.7 percent, the most among 16 major currencies tracked by Bloomberg.
Fuel and petrochemicals group Ultrapar Participacoes SA added 1.6 percent to 54.20 reais after the stock was rated buy in new coverage at Morgan Stanley.
Rossi climbed 2.1 reais to 2.98 reais. The BM&FBovespa Real Estate Index added 2.1 percent. An increase in home construction in Brazil will probably boost cash generation and profitability in the industry, analysts at Bank of America Corp. including Guilherme Vilazante wrote in a research note dated yesterday.
Brazilian swap rates, a gauge of expectations for interest-rate moves, fell on most contracts after a report from the national statistics agency showed inflation slowed in August. Consumer prices as measured by the IPCA index increased 6.09 percent from a year earlier, after rising 6.27 percent in July.
Brazil’s benchmark stock gauge approached a bull market today as a plunge in the currency and signs of an economic rebound in China, Brazil’s biggest export market, fueled a rally in commodity exporters. The index closed today 19 percent above this year’s bear market low on July 3, or 18 percent in dollar terms. That compares with an advance of 4.8 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
The Ibovespa last entered a bull market in January as optimism about the economic outlook for Brazil pushed consumer stocks higher, and sank back into a bear market in June as growth disappointed and inflation topped the upper limit of the government’s target.
Trading volume of stocks in Sao Paulo was 8.35 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.72 billion reais this year through Sept. 4, according to data compiled by the exchange.