The Ibovespa entered a bull market as better-than-forecast economic data in China boosted Brazilian commodity exporters including iron-ore producer Vale SA, outweighing a plunge by OGX Petroleo e Gas Participacoes SA.
The index climbed 0.9 percent to 54,251.85 at the close of trading in Sao Paulo, extending gains since this year’s low on July 3 to 20 percent. Port developer LLX Logistica SA jumped 103 percent during the span after founder Eike Batista agreed to cede control to EIG Global Energy Partners LLC.
The real has weakened 6.5 percent in the past three months, the most among 16 major currencies tracked by Bloomberg, boosting exporters’ revenue. The Standard & Poor’s GSCI index of 24 raw materials increased 4.1 percent in the same period as manufacturing picked up and inflation stayed below the government’s target in China, Brazil’s top trading partner.
“The losses we saw in the first half of the year may have been a bit excessive, and we’ve seen a correction in the past couple of months,” Joao Pedro Brugger, who helps manage 400 million reais as a portfolio manager at Leme Investimentos, said in a phone interview from Florianopolis, Brazil. “We’ve seen signs that there won’t be a hard landing in China, which is good news for companies with a big weighting on the Ibovespa, such as Vale.”
Brazil’s main stock index is the first among the biggest emerging nations to enter a bull market this year. Russia’s Micex entered a bull market Sept. 14, 2012, and has since lost 5.5 percent. India’s Sensex is down 0.8 percent this year after entering a bull market in 2012. China’s Shanghai Composite entered a bear market June 25 and has since gained 13 percent.
While the Ibovespa has rebounded in the past two months, it’s still down 20 percent in dollar terms this year, compared with a decline of 7.7 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Seven of nine raw-material companies on the Ibovespa reported earnings that exceeded forecasts for the three months ended in June, according to data compiled by Bloomberg. It was the first time that a majority of them beat estimates since the second quarter of last year.
In China, exports rose 7.2 percent in August from a year earlier, the General Administration of Customs said in Beijing on Sept. 7. That exceeded the 5.5 percent median estimate of analysts surveyed by Bloomberg. Inflation stayed below a government target, according to the national statistics bureau.
Bradespar SA, Banco Bradesco SA’s investment unit which shares control of Vale, jumped 2.8 percent to 25.90 reais today. Vale climbed 2.7 percent to 33.07 reais, the highest since May 9.
OGX fell 17 percent to 43 centavos today after founder Eike Batista challenged the oil producer’s decision to exercise a put option requiring him to inject as much as $1 billion into the company. The stock surged 27 percent on Sept. 6 after the company said it would exercise the put option that Batista pledged last year.
“I see a better outlook for equities, as there are signs that growth is picking up around the world,” Alvaro Bandeira, a partner at Orama Asset Management, said in a phone interview from Rio de Janeiro. “The Ibovespa suffers from what happens with OGX, but if you take this one out, the trend is positive.”
Anhanguera Educacional Participacoes SA dropped 0.9 percent to 13.95 reais today after Banco Itau BBA SA cut its recommendation on the education company to the equivalent of hold. Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, fell 1.1 percent to 97.57 reais as Abilio Diniz, the son of the company’s founder, resigned as chairman.
Trading volume of stocks in Sao Paulo was 8.8 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.