- Mining company is biggest contributor to Ibovespa’s advance
- Santander Brasil advances after better-than-estimated results
The Ibovespa rose for the first time this week as miner Vale SA and steelmakers including Metalurgica Gerdau SA climbed after Goldman Sachs Group Inc. raised its estimates for iron-ore prices.
Gerdau and rival Usiminas Siderurgicas de Minas Gerais SA posted the best rallies on the index. The Ibovespa snapped a two-day decline after newspaper Valor Economico reported that Acting President Michel Temer has already secured two-thirds of the necessary votes among lawmakers to pass measures aimed at trimming a budget deficit.
Brazil’s stocks are the best performers in the world this year in dollar terms on bets that the new administration would be able to shore up the country’s finances and pull Latin Americas’s biggest economy out of its worst recession in a century. During Dilma Rousseff’s presidency, the nation lost its investment grade and the value of the Ibovespa tumbled 23 percent.
"The mood in the world today is more positive, but the optimism is even bigger in Brazil now with the improvements in politics," Hersz Ferman, an analyst at the brokerage Elite Corretora, said from Rio de Janeiro. "Prospects for the advance in the new economic plan are encouraging not only for investors but for consumers and companies."
The Ibovespa added 0.1 percent to 56,852.84 at the close of trading in Sao Paulo. Vale advanced 3.4 percent, Metalurgica Gerdau climbed 4.5 percent, and Usiminas jumped 8.9 percent. The gauge was trading at 1.45 time its book value, the most expensive since October 2014.
The Brazilian unit of Banco Santander SA gained as much as 2.3 percent after second-quarter profit exceed analysts’ forecast.