The Ibovespa climbed for a fourth straight day as state-run companies including Petroleo Brasileiro SA rallied after a poll showed a decline in support for President Dilma Rousseff’s re-election.
Banco do Brasil SA, which is also controlled by the government, jumped to its highest level since November. Tractebel Energia SA, a unit of France’s GDF Suez, rallied after Brazil’s power regulator Aneel announced a proposal for higher rates. PDG Realty SA led homebuilders higher.
The Ibovespa added 0.9 percent to 55,102.44 at the close of trading in Sao Paulo, extending its four-day gain to 6.9 percent. Rousseff would have 38 percent of the votes in October’s election, according to a June 4-7 Ibope poll published yesterday, compared with 40 percent in May. A survey today showed that her lead in the race has narrowed.
“Brazil has struggled with sluggish growth and out-of-control inflation, and speculation that this may change is boosting the market,” Rogerio Freitas, a partner at hedge fund Teorica Investimentos, said by phone from Rio de Janeiro. “The more Dilma falls in polls, the higher equities will go.”
The slowest economic growth during a presidential term in more than two decades as well as almost four years of above-target inflation has eroded Rousseff’s popularity since late March. The Ibovespa entered a bull market on May 7, surging 20 percent from this year’s low, on bets a change in government will reduce intervention in state-run companies.
Petrobras, as Petroleo Brasileiro is known, gained 2.9 percent to 18.88 reais. Tractebel added 2.5 percent to 35.50 reais. BM&FBovespa’s Electrical Energy Index of 16 power utilities rose 1.2 percent.
“The weakening of Dilma should continue to fuel stock performance, especially for the regulated sectors,” JPMorgan Chase & Co. analysts Marcos M. Severine and Henrique Peretti wrote in a research note to clients published yesterday.
Banco do Brasil jumped 2.1 percent to 26.40 reais. PDG Realty gained 3.1 percent to 1.65 reais, extending its four-day rally to 5.8 percent.