- Raw-materials producers gain most among 10 industry groups
- Brazil pulp producers Fibria, Suzano rally as currency weakens
The Ibovespa rose for the third straight day as a rally in commodities prices early in the day boosted prospects for Brazilian exporters from miner Vale SA to pulp producer Fibria Celulose SA.
Steelmakers Gerdau SA and Cia. Siderurgica Nacional SA were the best performers on the index. Fibria, which gets most of its revenue from exports, rallied the most since 2013 as the real weakened. A gauge of raw-materials companies was the best performer among 10 industry groups as the Bloomberg Commodity Index rose as much as 1 percent before declining later in the day.
Stocks related to the commodity sector account for about 20 percent of the Ibovespa’s weighting, and gains in raw materials often spark rallies in the Ibovespa. Brazil’s benchmark equity gauge has lost 5.5 percent this year as Latin America’s biggest economy heads to its worst recession in more than a century amid a corruption scandal that started at the state oil company and spread to the country’s biggest builders.
"After some weeks of suffering in the beginning of the year, there has been some good news on the external front that’s encouraging investors," said Paulo Henrique Amantea, an analyst at the brokerage at H.H. Picchioni in Belo Horizonte, Brazil. "We’re not talking about a reversal of trend, though, because there are still many uncertainties for the country and also for the world’s growth."
The Ibovespa added 2.1 percent, the most in a week, to 40,947.70 at the close of trading in Sao Paulo as all but five of its 61 stocks advanced. The index traded at 10.1 times estimated earnings, which compares with a 10.7 ratio for the MSCI Emerging Markets Index.
Vale climbed 6 percent. CSN advanced 8.1 percent as competitor Usinas Siderurgicas de Minas Gerais gained 4.4 percent after confirming it hired Credit Suisse Group AG to help explore the potential sale of all or part of its manufacturing subsidiary. The MSCI Brazil/Materials Index gained 4 percent.
Fibria rose 8 percent as the real weakened 1.7 percent to 4.0676 per dollar. Rival Suzano Papel e Celulose climbed 6.6 percent.