The Ibovespa led gains in the Americas as speculation that Brazil’s top trading partner will bolster economic growth lifted exporters including Vale SA.
The benchmark stock gauge rebounded from the worst selloff since January after a Chinese newspaper reported that the government will accelerate mergers of state-owned enterprises to boost the economy. Vale joined a rally in global mining companies after data showed iron-ore imports by the Asian nation climbed to the highest level this year.
Commodity shares in the MSCI Brazil Index have tumbled 30 percent in 2015 on concern demand from China would falter amid an economic slowdown. The companies led a 15 percent plunge in the Ibovespa from its 2015 peak in May as President Dilma Rousseff grapples with an anemic economy amid impeachment talks and a widening graft probe at the state-controlled oil producer.
“The positive news out of China helps relieve concern over our own local economic issues, Raphael Figueredo, an analyst at brokerage Clear Corretora, said by phone from Sao Paulo.
The Ibovespa climbed 1.6 percent to 49,353 at the close of trading in Sao Paulo, after slumping 3.4 percent in the previous two trading days. The slide had sent its valuation to 11.4 times estimated earnings last week, the lowest level since March, according to data compiled by Bloomberg. The real posted the biggest advance among global major currencies.
Stocks gained even after a central bank survey showed that Brazil analysts raised their 2016 inflation forecast for the first time in 20 weeks amid a weakening real. Economists also forecast Latin America’s biggest economy will contract 1.97 percent this year and remains stagnant next year.
All 10 groups in the MSCI Brazil advanced Monday as commodity companies rallied by 2.7 percent. Vale, which gets a third of its revenue from China, climbed 3.6 percent, leading gains on the Ibovespa. Petroleo Brasileiro SA, the oil producer at the center of Brazil’s largest corruption scandal, jumped 2.7 percent.
Trading volume of equities in Sao Paulo was 5.77 billion reais ($1.68 billion), according to data compiled by Bloomberg. That compares with a daily average of 6.68 billion reais this year, exchange data show.