Brazilian Stocks Advance as Petrobras Rebounds on Crude Rally

  • Materials, energy stocks gain the most on MSCI Brazil Index
  • Pulp producers Fibria, Suzano among biggest declines Thursday

The Ibovespa advanced for the first time in seven sessions as gains in crude and iron ore bolstered producers Petroleo Brasileiro SA and Vale SA.

Vale and Petrobras, as Petroleo Brasileiro is known, contributed the most to the equity index’s advance. Crude rebounded after touching a 12-year low and iron ore ended a seven-session losing streak. Materials and energy stocks were the best performers among 10 industry groups on the MSCI Brazil Index. U.S. stocks surged from three-month lows as energy and health-care shares paced a rebound.

“With no news in the domestic front, equities tend to follow more closely what happens in the global markets,” said Alexandre Ghirghi, a partner at investment advisory firm Metodo Investimentos in Sao Paulo. “There are still many questions as to what will happen to commodity prices going forward, and that’s an issue affecting big companies in Brazil.”

Commodity producers account for about one fifth of the Ibovespa’s weighting. The index rose 1.4 percent to 39,500.11 at the close of trading in Sao Paulo, with 34 of its 61 stocks gaining. Oil jumped as much as 4.2 percent in New York, while iron ore climbed 1.8 percent to $40.22 a ton, according to a price index compiled by Metal Bulletin.

Petrobras rose 8 percent to 5.69 reais after slumping 16 percent in the previous three sessions. Vale rallied 6.8 percent to 7.52 reais, the biggest gain since Aug.

The Ibovespa earlier fell as much as 1.3 percent as the real advanced, dimming the outlook for pulp producers Fibria Celulose SA and Suzano Papel e Celulose SA, which were among the worst performers on the gauge Thursday.

Brazil’s benchmark equity gauge has fallen 8.9 percent this year as analysts forecast Latin America’s biggest economy will sink into the worst recession since at least 1901, with President Dilma Rousseff struggling to boost activity amid accelerating inflation and rising interest rates.

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