The Ibovespa rose to a four-month high as President Dilma Rousseff said her government will do whatever it takes for Brazil to meet its fiscal target this year.
The benchmark stock index advanced 2.3 percent to 52,321.76 at the close of trading in Sao Paulo as Rousseff said in an interview at the presidential palace in Brasilia on Tuesday that narrowing the budget gap will help boost confidence in the economy. She affirmed support for Finance Minister Joaquim Levy.
“Dilma is standing up for Levy’s economic adjustments,” Rogerio Freitas, a partner at hedge fund Teorica Investimentos, said in a telephone interview from Rio de Janeiro. “They’re correcting the path, so the market is becoming a little less pessimistic with Brazil now that the possibility of a disruptive scenario is lower.”
State-controlled Petroleo Brasileiro SA jumped after signing a $3.5 billion accord with the China Development Bank and as Rousseff said the oil producer at the center of a corruption scandal will publish delayed audited results this month. Steelmaker Cia. Siderurgica Nacional SA climbed after approving a buyback of as many as 32.8 million shares through June 30. Vale SA, the world’s largest iron-ore producer, fell as the commodity sank below $50 a metric ton. Emerging-market shares rose for a third straight day as China’s manufacturing posted a surprise expansion.
CSN, as Cia. Siderurgica is known, added 2.6 percent to 5.57 reais. Petrobras gained 4.9 percent to 10.21 reais. Vale fell 2.8 percent to 15.01 reais.
Rousseff said in the interview that spending cuts, including postponing some expenditures and reducing administrative costs, will account for a big part of the needed adjustments to narrow the budget shortfall. She also said that “Levy is very important for Brazil today and he stands very firm.”
Levy has pledged to boost the primary surplus, which excludes interest payments, to 1.2 percent of gross domestic product this year from a 0.64 percent deficit in 2014.
The Ibovespa entered a bear market Dec. 12 after falling 22 percent from last year’s high in September. Trading volume of equities in Sao Paulo was 8.4 billion reais ($2.65 billion) Wednesday, according to data compiled by Bloomberg. That compares with a daily average of 6.65 billion reais this year, according to the exchange.