Ibovespa Rises as Vale, Gerdau Leads Rally in Materials Stocks

The Slow Unraveling of Brazil, Explained in Two Minutes
  • Lender Itau, America Movil, miner Vale Join M&A Speculation
  • Investors worldwide weigh Fed’s decision on interest rates

The Ibovespa rose for a third straight day as higher commodity prices boosted the outlook for raw-material producers including mining company Vale SA and steelmaker Gerdau SA.

Vale also advanced as O Globo columnist Lauro Jardim reported the company has agreed to sell a stake in its fertilizer unit. A gauge of materials stocks on the MSCI Brazil Index was the best performer among 10 industry groups. Itau Unibanco Holding SA also rose after people familiar with the issue said the bank is in exclusive talks to acquire Citigroup Inc.’s assets in Brazil.

As President Michel Temer vows to put in place unpopular reforms aimed at shoring up the budget, companies and investors are positioning themselves to take advantage of the expected recovery. When meeting with investors Wednesday in New York, Temer said Brazil has great political stability and invited the audience to take part in a “new vision” for the country. Commodities and emerging-market equities were also buoyed Wednesday after the Federal Reserve kept interest rates steady.

"The mood in the world is more positive today, and Brazil is benefiting because there’s also big optimism regarding the country’s rebound," Vitor Suzaki, an analyst at the brokerage Lerosa Investimentos, said from Sao Paulo.

Brazil’s benchmark stock index added 1.1 percent to 58,393.92 at the close of trading in Sao Paulo, with 41 of its 58 stocks higher. The Bloomberg Commodity Index advanced for a fifth consecutive session. Vale rose 6.3 percent, the most since June 3, and Gerdau gained 5.7 percent. Itau climbed 1 percent.

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