Ibovespa Rises With Petrobras After Levy Affirms Budget Goals

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The Ibovespa extended its second straight weekly advance as Finance Minister Joaquim Levy affirmed the government’s commitment to shoring up Brazil’s balance sheet, bolstering confidence in the outlook for economic growth.

Petroleo Brasileiro SA rose to a four-month high after people familiar with the matter said the state-controlled oil company may sell deepwater oil fields. Frozen-dinners maker BRF SA fell after higher-than-forecast inflation damped prospects for companies depending on domestic demand.

The Ibovespa added 0.8 percent to 54,214.11 at the close of trading in Sao Paulo. The benchmark equity gauge extended its weekly advance to 2.1 percent as Levy said during an event that the government is seeking to bolster investors’ confidence.

“Levy has been doing a lot to increase the credibility of the government and to get Congress’s approval for the fiscal adjustment measures,” Raphael Figueredo, an analyst at the brokerage firm Clear Corretora, said in a phone interview from Sao Paulo. “That will put the economy back on track.”

Party leaders in Brazil’s ruling coalition signed an agreement this week to back the government’s plan to narrow the budget deficit after Vice President Michel Temer took over negotiations with lawmakers.

Petrobras, as Petroleo Brasileiro is known, climbed 2.2 percent to 11.82 reais, its highest price since Dec. 5. The company is considering including fields from its fastest-growing deep-water oil region in a divestment plan to raise money for expenditures and debt payments, according to six people with knowledge of the proposal. Neither Petrobras nor the Brazilian presidency responded to requests for comment.

Producer Prices

BRF slid 2 percent to 63.95 reais after the Getulio Vargas Foundation’s inflation report. It said wholesale, construction and consumer prices rose 1.03 percent in its first April preview while the median forecast of economists surveyed by Bloomberg called for a 0.75 percent increase.

Producer prices climbed 1.3 percent after a prior 0.8 percent increase. Housing, a component of consumer prices, rose 1.4 percent, accelerating from the prior 0.7 percent advance.

“What we’re seeing at the beginning of the year is bad inflation, concentrated on producer prices such as electricity, which means consumers have less money to buy other things,” Pablo Spyer, operational director at the brokerage firm Mirae Asset Securities, said in a phone interview from Sao Paulo.

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 6.7 billion reais ($2.2 billion) Friday, according to data compiled by Bloomberg. That’s in line with the daily average this year, according to the exchange.

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