Bovespa Rises as Gafisa Leads Brazilian Consumer Stock Advance

The Bovespa index rose as homebuilder Gafisa SA led gains by companies that sell in the local market after President Dilma Rousseff announced cuts in taxes on food staples to curb inflation.

Online retailer B2W Cia. Global do Varejo advanced to a six-week high. Cia. Energetica de Sao Paulo, Brazil’s second-largest power generator by capacity, rose to the highest in a month as Credit Suisse Group AG recommended buying the stock, citing rule changes that are expected to boost cash flow. Oil company OGX Petroleo & Gas Participacoes SA slumped after saying its daily production per offshore well fell to 3,800 barrels in February from 4,900 in the prior month.

The Bovespa rose 0.2 percent to 58,544.79 at the close of trading in Sao Paulo. Forty-five stocks gained on the gauge while 21 declined. Brazilian swap rates fell after Rousseff announced last week cuts in taxes on food staples to curb inflation, reviving speculation that the central bank will refrain from increasing borrowing costs.

Gafisa gained 5.7 percent to 4.28 reais. B2W rose 3.7 percent to 16.15 reais. Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, rose 3.2 percent to 104.75 reais.

Cesp, as Energetica de Sao Paulo is also known, advanced 4 percent to 20.02 reais.

The Bovespa earlier declined as much as 1.1 percent as raw-material producers dropped after lower-than-forecast Chinese industrial output damped the outlook for global growth. China’s statistics bureau said industrial production climbed 9.9 percent in the first two months of 2013, below the median forecast of 10.6 percent among economists surveyed by Bloomberg.

OGX Drops

OGX plunged 15 percent to 2.65 reais after earlier tumbling as much as 20 percent to a record-low 2.49 reais. Steelmaker Cia. Siderurgica Nacional SA slipped 1.4 percent to 10.49 reais.

The Bovespa has dropped 7.5 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index of shares in Brazil, Russia, India and China has slid 2 percent over the same period.

Brazil’s benchmark equity gauge trades at 11.8 times analysts’ earnings estimates for the next four quarters, compared with 11.1 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 6.35 billion reais today, data compiled by Bloomberg show. That compares with a daily average of 7.59 billion reais this year through March 6, according to data compiled by the exchange.

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