Ibovespa Extends World’s Top Rally as Banks Rise on Rebound Bets

  • Financial companies contribute most to index’s advance
  • Vale climbs as prices for iron ore reach highest this month

The Ibovespa extended the world’s biggest advance this year after financial companies rose on optimism growth will rebound as policy makers around the globe act to counter the effects of Britain’s decision to leave the European Union.

Lenders Itau Unibanco Holding SA and Banco Bradesco SA, the heaviest-weighted stocks on the benchmark equity index, were among the biggest contributors to the gauge’s advance. BM&FBovespa SA, the operator of Brazil’s exchange, rose the most in seven weeks after newspaper O Globo reported the company will appoint JPMorgan Chase’s Jose Berenguer Neto as its new chief executive officer. All 10 industry groups in the MSCI Brazil Index climbed. Miner Vale SA rose as iron ore reached its highest level since May.

Brazil’s stocks joined a rally in the Western Hemisphere on Thursday as the European Central Bank was said to be considering loosening the rules for its bond purchases after reaction to the Brexit vote has pushed yields on some bond down so far they are no longer eligible. A calmer international environment would favor efforts by Acting President Michel Temer to shore up the finances of Latin America’s biggest economy and put an end to its worst recession in a century.

"As investors feel more confident over the prospects for Brazil, all we need is that the risk aversion globally diminishes too," Rafael Ohmachi, an analyst at the brokerage Guide Investimentos, said from Sao Paulo. "There are still a lot of uncertainties regarding the effects of the U.K. referendum, so we should brace for more volatility."

The Ibovespa added 1 percent to 51,526.93 at the close of trading in Sao Paulo, extending this year’s gains in dollars to 48 percent. Itau rose 2.3 percent while Bradesco advanced 0.6 percent. Vale climbed 1.2 percent. BM&FBovespa, who denied any formal plans to replace its head, rose 4.7 percent.

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