The Ibovespa gained for a second straight day as a rebound in iron-ore prices boosted Vale SA, outweighing losses in companies that rely on domestic consumption after data showed Brazilian consumer prices increased more than forecast.
Paper maker Suzano Papel e Celulose SA led gains on the the MSCI Brazil/Materials Index, which snapped three days of losses. Petroleo Brasileiro SA advanced the most in two weeks after Credit Suisse Group AG raised the state-controlled oil producer to the equivalent of hold. Drugstore chain Raia Drogasil SA sank the most in seven weeks.
The Ibovespa added 0.4 percent to 45,861.81 at the close of trading in Sao Paulo. Forty-four stocks rose on the gauge while 26 fell. The real gained 0.3 percent to 2.3571 per dollar at 5:23 p.m. local time. Iron-ore for immediate delivery increased 2.4 percent to $107.40 a ton, the most since Nov. 1, according to prices compiled by The Steel Index Ltd.
“The gains in iron-ore prices are helping Vale today,” Pedro Galdi, the chief strategist at brokerage firm SLW Corretora, said by phone from Sao Paulo. “The stock’s decline this year seems exaggerated considering it’s such a good company.”
Vale, the world’s largest producer of iron ore, added 1.4 percent to 26.46 reais, trimming this year’s loss to 19 percent. Petrobras, as Petroleo Brasileiro is known, rose 1.6 percent to 13.32 reais. Suzano climbed 2.3 percent to 8.80 reais.
The Ibovespa fell as much as 0.4 percent earlier. Brazil’s IPCA consumer price index advanced 0.69 percent in February after a 0.55 percent increase in the prior month, according to data from the national statistics bureau. The median estimate among 49 economists surveyed by Bloomberg was for an increase of 0.65 percent.
“The inflation data came in higher than expected, and that exerts some pressure. It creates an uncertainty about the economy, and that boosts risk aversion,” Ari Santos, an equity trading manager at H. Commcor, said by phone from Sao Paulo. “The mood isn’t good, but Petrobras is holding the index at this level.”
Raia Drogasil SA slipped 3.6 percent to 16.20 reais. Retailer Cia. Brasileira de Distribuicao Grupo Pao de Acucar dropped 2.1 percent to 93.64 reais.
The Ibovespa has tumbled 19 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target and concern mounted that higher government spending will lead to a reduction in the country’s credit rating.
Trading volume of stocks in Sao Paulo today was 6.2 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 6.34 billion reais this year, according to data from the exchange.