Ibovespa Rises as Crude's Gain Improves Prospects for Petrobras

  • Gauge of material stocks rallies the most in seven weeks
  • Lender Itau leads financial stocks higher on low valuations

The Ibovespa rose for the first time in three days as an advance in oil prices boosted the outlook for Petroleo Brasileiro SA’s offshore investments.

Petrobras, as the state-controlled crude producer is known, rebounded from a three-month low. Mining company Vale SA followed an increase in iron ore. The MSCI Brazil/Materials Index rose the most in seven weeks. Voting shares of Itau Unibanco Holding SA rebounded from their lowest level since March 2014.

Brazilian equities joined a rally in emerging markets on speculation officials will boost economic stimulus in China, the Latin American country’s top export destination. Chinese leaders signaled they will take further steps to support growth, including widening the fiscal deficit and stimulating the housing market, to stem the economy’s slowdown.

"The mood is much more positive as raw materials climb," Rafael Ohmachi, an analyst at brokerage Guide Investimentos, said from Sao Paulo. "In addition, banks seem like a good opportunity as they are pretty solid and have fallen a lot."

The Ibovespa added 0.7 percent to 43,500.49 at the close of trading in Sao Paulo as 35 of its 63 stocks gained. Petrobras rose for the first time in five days while Vale advanced 2.9 percent.

Investors also watched comments from new Finance Minister Nelson Barbosa, who told foreign media Tuesday that Brazil has no plans at this time to loose next year’s fiscal target, without specifying how his team will achieve its goals if lawmakers block government legislation to raise taxes. Fitch Ratings last week cut the country to junk, becoming the second major ratings company to do so, on Brazil’s inability to shore up its finances.

Meatpacker JBS SA fell as much as 3.2 percent before closing 0.7 percent higher. The company is said to be included in a report of congressional probe into Brazil’s development bank, newspaper Folha de S.Paulo reported, without saying how it got the information.

The Ibovespa has lost 13 percent this year as the country heads to its longest recession since the 1930s amid a political crisis that’s threatening President Dilma Rousseff’s job.

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