Bovespa Rises as Manufacturing Data Boost Growth Outlook

The Bovespa index advanced the most in almost a month, paring a weekly decline as stocks linked to consumer demand gained after better-than-forecast industrial output bolstered the outlook for Brazil’s economic growth.

Hypermarcas SA, the maker of more than 180 products from pharmaceuticals to diapers, jumped to the highest since May 2011. Card-payment processor Cielo SA had its biggest weekly advance in three months. Mining company Vale SA climbed after fourth-quarter iron-ore output beat forecasts.

The Bovespa gained 1 percent to 60,351.16 at the close of trading in Sao Paulo, paring its drop this week to 1.3 percent. Forty-eight stocks rose on the measure today while 18 fell. The real strengthened 0.2 percent to 1.988 per U.S. dollar after a report showed industrial production slid 3.6 percent in December from a year earlier, less than the 4.8 percent median forecast of 29 economists surveyed by Bloomberg.

“The industrial output was slightly better than expected, and maybe that could be the turning point for economic activity, which has been sluggish,” Luis Gustavo Pereira, an analyst at Futura Corretora in Sao Paulo, said in a phone interview. “Stocks haven’t been doing so well because of concern about growth, among other things.”

Brazil’s industrial production was unchanged in December from a month earlier after contracting a revised 1.3 percent in the prior month, the national statistics agency reported today. The median forecast of 29 analysts surveyed by Bloomberg was for production to decline 0.4 percent.

Hypermarcas, Cielo

Hypermarcas rose 0.6 percent to 17.31 reais. Cielo added 2.4 percent to 57.65 reais, extending the gain this week to 5.3 percent. Homebuilder Brookfield Incorporacoes SA advanced 6.5 percent to 3.60 reais as the BM&F Bovespa Real Estate Index jumped the most in eight weeks.

Vale gained 1.3 percent to 39.20 reais. Total output rose 3.1 percent to 85.5 million metric tons in the fourth quarter, the Rio de Janeiro-based miner said in a regulatory filing today, exceeding the 83.4 million ton average of six analysts’ estimates compiled by Bloomberg.

Petroleo Brasileiro SA climbed 2.1 percent to 18.46 reais, contributing the most to the gauge’s advance. Shares of the state-controlled oil company retreated 5.9 percent this week.

Valid Solucoes & Servicos de Seguranca em Meios de Pagamento & Identificacao SA dropped 1 percent to 42.03 reais. Itau BBA cut its recommendation on the commercial services provider to the equivalent of hold.

Bull Market

The Bovespa entered a bull market on Jan. 3 after rising 21 percent from last year’s low on June 5 as stimulus from central banks around the world eased concern that economic growth might miss expectations while borrowing costs at a record low in Brazil boosted equity demand. The index has since pared its advance to 15 percent.

Brazil’s benchmark equity gauge trades at 11.2 times analysts’ earnings estimates for the next four quarters, compared with 11 for MSCI’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 7.32 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.26 billion reais this year through Jan. 30, according to data compiled by the exchange.

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