The Ibovespa extended a weekly advance, joining gains in emerging markets, after U.S. jobs data sparked bets the Federal Reserve won’t raise rates any time soon.
JBS SA, which became the world’s biggest meat processor by spending $5 billion to buy U.S. companies, climbed to a record. Petrochemical company Braskem SA extended a three-day rally to 11 percent. Century-old retailer Cia. Hering sank the most since 2004 after earnings trailed analysts estimates.
The Ibovespa added 0.4 percent to 57,149.33 at the close of trading in Sao Paulo, bringing its gain for the week to 1.6 percent. Stocks in emerging markets rose as a rebound in U.S. payrolls boosted optimism the economy is accelerating, but not fast enough to warrant higher borrowing costs in June. The Fed has been weighing a rate increase after a long period of monetary stimulus that’s helped pace a rally in developing-nation assets.
“The U.S. data signal it will take longer for the Fed to increase interest rates, giving stocks a boost,” Ari Santos, an equity trading manager at H. Commcor in Sao Paulo, said in a telephone interview.
The Ibovespa entered a bull market on April 24 after rallying more than 20 percent from its January low on bets spending cuts and the release of Petroleo Brasileiro SA’s results would be enough for Brazil to avoid a credit rating downgrade.
JBS rallied 5.7 percent to 16.52 reais, the highest level since March 2007. Braskem jumped 9.1 percent to 14.84 reais.
Hering tumbled 22 percent to 14.51 reais, the lowest since June 2010. The company also said it expects declining results over the next few quarters, underscoring a slowdown of Latin America’s largest economy.
“Hering’s first-quarter results came as a first glance to an even tougher year ahead,” Fator Corretora analysts led by Tales Paes wrote in a note. Paes is reviewing the recommendation for the stock, he wrote.
Profits for the 41 companies in the Ibovespa which reported first-quarter results dropped by an average of 40 percent, according to data compiled by Bloomberg.
Brazil’s consumer prices in April rose less than analysts predicted as the economy is forecast to show the deepest contraction since 1990. Policy makers have signaled they will increase borrowing costs for a sixth straight time in June as inflation remains above the 6.5 percent upper limit of its annual target.
Cia. Brasileira de Distribuicao, also known as GPA and Pao de Acucar, lost 3.4 percent to 97.87 reais. Chief Executive Officer Ronaldo Iabrudi said on a conference call Friday the company is making all efforts to make profitability similar to 2014 after net income missed estimates for a second straight quarter.
Trading volume of equities in Sao Paulo was 7.48 billion reais on Friday, according to data compiled by Bloomberg. That compares with a daily average of 7 billion reais this year, according to the exchange.