Ibovespa Extends Best Month Since March as Petrobras Rallies

  • Brazilian crude oil producer sold stake in field to Statoil
  • Ambev, Embraer drop after worse-than-forecast results

The Ibovespa extended its biggest monthly advance since March after oil giant Petroleo Brasileiro SA took a step further in its plan to reduce debt by agreeing to sell a stake in a field for $2.5 billion to Norway’s Statoil ASA.

Petrobras, as Brazil’s state-controlled crude producer is known, rose the most in two weeks. Frozen-dinner maker BRF SA surged as Chairman Abilio Diniz said the outlook for the company in the rest of the year has improved. Brewer Ambev SA and planemaker Embraer SA slumped on disappointing results.

Brazilian stocks have gained 17 percent in the past two months on bets that Vice President Michel Temer, who replaced Dilma Rousseff as the country’s leader in May, will be able to pull the country out of recession. The recent improvements to Petrobras’s management and strategy have also been seen as part of the efforts to win back investors’ confidence.

"The market is optimistic over the outlook for the country with Temer, though his job is not easy," Paulo Figueiredo, an economist at FN Capital, said from Petropolis, Brazil.

The Ibovespa added 1.1 percent to 57,308.21 at the close of trading in Sao Paulo, extending its monthly rally to 11 percent, the biggest in the Americas. Petrobras climbed 3.8 percent. QGEP Participacoes SA, a partner of Petrobras in the oilfield, surged 49 percent, the most on record. BRF rose 6.5 percent.

The index fell as much as 0.6 percent earlier. Ambev lost 3.3 percent and Embraer slumped 15 percent. Miner Vale SA followed a decline in iron-ore prices. Pulp producer Fibria SA fell to its lowest in almost four years as the real appreciated, dimming the prospects for its exports.

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