- Lender Bradesco among top contributors to Ibovespa’s gain
- Steelmaker CSN and miner Vale follow advance in metals prices
The Ibovespa rebounded from its lowest level in six weeks as cheap valuations lured investors to Latin America’s largest economy.
Lender Banco Bradesco SA, trading at the lowest price-to-earnings ratio in two months, was among the biggest contributors to the benchmark equity index’s advance. Cia. Siderurgica Nacional SA joined a global steelmaker rally as metals rose. Miner Vale SA climbed from an eight-week low.
Brazil’s stocks have rallied 56 percent in dollar terms this year on speculation that the new government of President Michel Temer would succeed in putting in place a plan to pull the country out of recession and win back investor confidence. While political tensions that contributed to the Ibovespa’s 3 percent plunge Tuesday remain high, investors who expect reforms to pass saw an opportunity to buy.
"There’s a lot of uncertainties on our horizon, but Brazil can’t afford not to get back on track," Jason Vieira, chief economist at Infinity Asset Management, said from Sao Paulo. "There’s reason for optimism as we’ve been seeing Temer firmly negotiate with politicians the measures of the reforms."
The Ibovespa advanced 0.4 percent to 57,059.46 at the close of trading in Sao Paulo as 30 of its 58 stocks climbed. Bradesco rose 0.8 percent, while CSN added 1.5 percent. Vale climbed 2.2 percent. Bradespar SA, the holding company that has Vale as its biggest investment, was the best performer on the index as it added 3.7 percent.