- Commodity producers followed gains in raw-materials prices
- Brazilian assets benefit from reduced global tension
The Ibovespa joined global benchmarks Tuesday in rebounding from the massive selloff that followed the U.K.’s vote to leave the European union.
After losing 2 billion reais ($600 million) in two days, Brazil’s benchmark equity index rose amid speculation that global policy makers are prepared to act to limit the fallout from the U.K.’s exit. State-controlled oil producer Petroleo Brasileiro SA and miner Vale SA were among the biggest contributors to the gains as raw-materials climbed. Commodity producers account for 21 percent of the Ibovespa’s weighting.
Improved prospects for the country’s exporters added to the optimism that Acting President Michel Temer will be able to shore up Brazil’s finances and restore confidence after the central bank signaled that interest rates may be held at the highest level in a decade for longer than initially expected, also helping to offset the negative effects of the Brexit.
"Brazil is very dependent on the international economic prospects, so it’s very positive that the tension has eased,” said Jason Vieira, the chief economist at Infinity Asset Management in Sao Paulo. “Investors now may pay a little more attention to the domestic prospects, which have also improved."
The Ibovespa advanced 1.8 percent to 50,118.76 at 10:41 a.m. in Sao Paulo as all but five of its 59 stocks advanced. Petrobras, as Petroleo Brasileiro is known, gained 4.4 percent, and Vale rose 3.7 percent.