The Ibovespa rose the most in three weeks, joining a rally in emerging-market stocks, as signs of easing tension in Ukraine spurred demand for riskier assets.
Homebuilder Gafisa SA was the best performer on the gauge as a measure of profitability exceeded forecasts. Drugstore chain Raia Drogasil SA led gains in consumer stocks. Iron-ore miner Vale SA followed commodities higher amid wagers that subdued inflation will give policy makers more scope to ease policy.
The Ibovespa rose 1.9 percent to 56,613.32 at the close of trading in Sao Paulo, its biggest gain since July 18. The real added 0.4 percent to 2.2735 per dollar at 5:37 p.m. local time. The MSCI Emerging Markets Index climbed 1.5 percent after Russia’s Defense Ministry said Aug. 8 it was ending military drills in the southern Astrakhan region, and as President Vladimir Putin urged Ukraine to halt fighting in the nation’s east.
“The Brazilian market is benefiting as investors seem more willing to take risk,” Pedro Galdi, the chief analyst at brokerage firm SLW Corretora, said by phone from Sao Paulo.
Brazil’s Getulio Vargas Foundation said its IGP-M index of wholesale, construction and consumer prices dropped 0.31 percent in its first August preview. That compares with a median estimate for deflation of 0.29 percent from 11 economists surveyed by Bloomberg.
Gafisa rallied 4.6 percent to 3.17 reais while the BM&FBovespa Real Estate index rose 0.6 percent. The company’s earnings before interest, taxes, depreciation and amortization more than tripled to 89.8 million reais ($39.4 million) in the second quarter, according to an Aug. 8 regulatory filing. That compares with an average estimate of 66 million reais among three analysts surveyed by Bloomberg.
Raia Drogasil added 2.8 percent to 20.68 reais. It was the best performer on the MSCI Brazil/Consumer Staples index, which rose 2.3 percent.
Vale climbed 1.1 percent to 28.46 reais. The Standard & Poor’s GSCI Index of raw materials rose 0.2 percent. Commodity producers account for about a third of the Ibovespa’s weighting.
The benchmark equity gauge has rallied 26 percent from this year’s low on March 14 as oil producer Petroleo Brasileiro SA jumped on speculation that President Dilma Rousseff will lose her re-election bid in October.
Trading volume of equities in Sao Paulo was 5.8 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.5 billion reais this year, according to data from the exchange.