The Ibovespa rose the most among the world’s major equity benchmarks as a Brazilian election poll showed Marina Silva, who favors reversing the fiscal policies of President Dilma Rousseff, would win in a runoff.
Petroleo Brasileiro SA contributed the most to the gauge’s advance on bets a change in government would reduce intervention in state-controlled companies. Phone company Oi SA rallied after saying it’s working on an acquisition of a stake in Tim Participacoes SA, which also jumped. Vale SA followed iron ore lower.
The Ibovespa climbed 1.9 percent to 60,950.57 at the close of trading in Sao Paulo, its highest level since January 2013. Brazil’s benchmark equity index has gained 36 percent from this year’s low on March 14.
“It’s becoming clearer and clearer that Silva is the best chance for the opposition to win the election,” Eduardo Velho, the chief economist at INVX Global Partners, said by phone from Rio de Janeiro. “This is boosting the stock market now, and the trend should last for some time as Silva gains more support. Both she and Aecio Neves are signaling that they would take very positive measures for the Brazilian economy such as cutting government expenses and reducing intervention.”
Silva has 45 percent of voters’ support in an Oct. 26 second round vote against Rousseff, who garners 36 percent, according to the Aug. 23-25 poll that surveyed 2,506 people. Silva is running second in the Oct. 5 first round with 29 percent of support versus Rousseff’s 34 percent. Senator Aecio Neves has 19 percent in the survey that has a margin of error of plus or minus two percentage points.
Petrobras rose 4.6 percent to 22.84 reais on prospects for a change in government.
Silva replaced Eduardo Campos as the Brazilian Socialist Party candidate after his death in a plane crash Aug. 13. Her campaign team has pledged to slow inflation to 3 percent by the end of 2018 from 6.5 percent last month, support formal autonomy for the central bank and undo fiscal policies that led to a sovereign debt rating downgrade this year.
Oi rallied 6.7 percent to 1.43 reais. The company said in a statement yesterday that it hired Banco BTG Pactual SA to review alternatives “with the purpose of enabling a viable proposal for the acquisition of the shares of Tim” indirectly held by Telecom Italia SpA. Tim jumped 11 percent to 12.72 reais in its biggest one-day gain since 2010.
Vale dropped 1.4 percent to 27.25 reais. Iron ore for immediate delivery fell 70 cents, or 0.8 percent, to $88.20 a ton, according to a price gauge compiled by The Steel Index Ltd.
Trading volume of equities in Sao Paulo was 11.4 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.56 billion reais this year, according to the exchange.