The Ibovespa rose the most among the world’s biggest stock gauges as Localiza Rent a Car SA’s earnings spurred optimism about the outlook for corporate profits and OGX Petroleo e Gas Participacoes SA surged.
OGX, the oil company founded by Eike Batista, jumped after O Estado de S.Paulo reported that the company will receive $200 million from a group of U.S. investors it didn’t identify to fund its projects. Steelmaker Cia. Siderurgica Nacional SA rose as commodities advanced after the U.S. Senate crafted a proposal to raise the country’s debt ceiling before tomorrow’s deadline.
The Ibovespa climbed 1.8 percent to 55,973.03 at the close of trading in Sao Paulo, the most among the world’s biggest 20 stock gauges tracked by Bloomberg. Thirty-four of the benchmark’s 73 member stocks gained. Localiza, the first member of the gauge to release third-quarter results, posted adjusted net income of 102.1 million reais, exceeding the average estimate of 92.3 million reais among analysts surveyed by Bloomberg.
“Companies will probably report better results than they did in the second quarter, supporting a rebound in the Ibovespa,” Joao Pedro Brugger, a portfolio manager at Leme Investimentos, said in a phone interview from Florianopolis, Brazil. “OGX may be getting closer to finding a solution for its problems, which could help bring some more optimism to the equity market.”
Localiza added 2.7 percent to 36.10 reais, the most since July 11. The company, whose profit increased 43 percent from a year earlier, has reported earnings that topped forecasts for four straight quarters, data compiled by Bloomberg show. The stock is up 1.1 percent this year.
The company “is proving that its earnings continue to grow at a double-digit rate even in a year of increasing interest rates and lower operating margins,” Banco Itau BBA SA analysts including Renata Faber wrote in a note to clients.
Brazil’s economic activity index, a proxy for gross domestic product, increased 1.32 percent in August from a year earlier, the central bank said today. The median estimate among economists surveyed by Bloomberg was for 1.5 percent growth.
The real rose 0.1 percent to 2.1761 per dollar at 5:31 p.m. local time.
OGX surged 38 percent to 47 centavos, extending a three-day rally to 124 percent. With the $200 million the company is raising, production in Tubarao Martelo field may start in mid-November, O Estado reported, without saying where it got the information. OGX’s press office declined to comment on the report when contacted by Bloomberg News.
In the U.S., leaders of both political parties in the Senate reached an agreement to end the fiscal impasse and to increase U.S. borrowing authority. The Senate and House planned to vote on it later today, and the White House press secretary said President Barack Obama supports the deal.
CSN, as Cia. Siderurgica is known, added 2.6 percent to 11.74 reais. The Standard & Poor’s GSCI index of 24 raw materials rose 0.8 percent.
Homebuilder Gafisa lost 1.1 percent to 3.49 reais after earlier falling as much as 3.7 percent. The company logged a 22 percent drop in booked sales during the third quarter, according to preliminary results in a regulatory filing posted after the close of trading yesterday.
The Ibovespa entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is down 13 percent in dollar terms this year, compared with a decline of 2.3 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume of stocks in Sao Paulo today was 11.84 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 7.56 billion reais this year through Oct. 14, according to data compiled by the exchange.