The Ibovespa posted a fourth monthly advance, its longest winning streak since 2009, as Gerdau SA led steelmakers higher after reporting quarterly earnings that exceeded analysts’ estimates.
Usinas Siderurgicas de Minas Gerais SA climbed after HSBC Holdings Plc raised its recommendation on the steelmaker to the equivalent of buy. Retailer Magazine Luiza SA jumped after reporting third-quarter net income that was 52 percent more than Banco Itau BBA SA had forecast. Plane builder Embraer SA dropped after its earnings trailed analysts’ estimates.
The Ibovespa climbed 0.2 percent to 54,256.20 at the close of trading in Sao Paulo, pushing the gain this month to 3.7 percent. The real slumped 2.1 percent to 2.2376 per U.S. dollar at 5:33 p.m. local time. Steelmakers gained as a weaker currency made imports more expensive and the industry more competitive.
“A weaker real is giving a boost to some stocks, such as steelmakers,” Luis Gustavo Pereira, a strategist at Futura Corretora brokerage in Sao Paulo, said in a phone interview. “Steelmakers fell quite a lot in the first half of the year, but the latest news about them has been more positive, and there’s probably room for further gains.”
Gerdau added 4.7 percent to 17.67 reais. The company posted adjusted net income of 595.1 million reais, which compares with the average estimate of 441.4 million reais, according to data compiled by Bloomberg.
Usiminas, as Usinas de Minas Gerais is also known, advanced 1.7 percent to 11.88 reais, extending this month’s increase to 13 percent.
Embraer dropped 0.8 percent to 16.35 reais. Magazine Luiza jumped 5.6 percent to 9.50 reais.
The Ibovespa earlier dropped as much as 1.1 percent after oil company OGX Petroleo e Gas Participacoes SA plunged on its bankruptcy protection filing. Shares sank 24 percent, extending this year’s slump to 97 percent, as trading volume surged to 3.5 times the three-month daily average. While the stock will still trade in Sao Paulo, it will no longer be a member of the Ibovespa benchmark starting tomorrow, BM&FBovespa said in a statement. The index will be rebalanced after OGX’s removal.
Trading volume of stocks in Sao Paulo was 8.11 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.61 billion reais this year through Oct. 22, according to the latest data available from the exchange.