Ibovespa Climbs as Petrobras Jump Offsets Cut to Rating Outlook

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The Ibovespa advanced as Petroleo Brasileiro SA rallied on speculation the oil company will soon report audited earnings, overshadowing concern that Latin America’s largest economy may lose its investment-grade status.

Cia. de Saneamento de Minas Gerais, the water utility owned by Minas Gerais state, gained after Valor Economico reported the company may get a capital injection. Itau Unibanco Holding SA led losses among financial stocks after Exame magazine reported Brazil may raise taxes on banks’ profits.

The Ibovespa rose 0.3 percent to 53,802.66 at the close of trading in Sao Paulo. Petrobras jumped 9.1 percent to 11.56 reais, the highest level since December, after Folha de S.Paulo reported without saying where it got the information that the producer will release long-delayed 2014 audited earnings by April 20.

“Investors are waiting for it,” Rogerio Freitas, a partner at hedge fund Teorica Investimentos, said by phone from Rio de Janeiro. “It could have a positive impact not only on Petrobras, but on markets in general.”

Petrobras hasn’t released audited results since the second quarter of 2014 as it tries to account for corruption-related losses amid Brazil’s largest-ever kickback investigation.

The gauge pared gains after Fitch Ratings cut the outlook on the Brazil’s sovereign rating to negative from stable. Fitch kept Brazil at BBB, the second-lowest investment grade.

“While the government has begun a macroeconomic adjustment process to boost policy credibility and confidence, downside risks related to its effective implementation and durability persist,” Fitch analysts led by Shelly Shetty wrote.

Itau dropped 2 percent to 36.75 reais. Cia. de Saneamento de Minas Gerais rose 0.5 percent to 18.85 reais.

Trading volume of equities in Sao Paulo was 7.7 billion reais ($2.5 billion) on Thursday, according to data compiled by Bloomberg. That compares with a daily average of 6.7 billion reais this year, according to the exchange.

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