Ibovespa Futures Rise as Petrobras Earnings Top Estimates

Brazil’s Ibovespa futures advanced after oil company Petroleo Brasileiro SA, the heaviest-weighted stock on the benchmark gauge, posted earnings that beat analysts’ estimates.

Petrobras’s results prompted Bank of America Corp. to recommend buying the stock. Iron ore producer Vale SA may be active as Valor Economico reported Brazil shelved a plan to raise a mining tax to as much as 6 percent from 3 percent and now considers increasing it to as much as 4 percent. The newspaper cited Energy Minister Edison Lobao.

Ibovespa futures contracts expiring in June gained 1.3 percent to 55,005 at 9:40 a.m. in Sao Paulo. The real strengthened 0.3 percent to 1.9935 per dollar.

Petrobras reported first-quarter net income of 7.69 billion reais ($3.86 billion), or 59 centavos a share, more than the 57-centavo average of 11 analysts’ estimates, according to data compiled by Bloomberg.

The Getulio Vargas Foundation reported today that its IGP-M inflation index of wholesale, construction and consumer prices rose 7.30 percent in the year ending on April 20, less than the median estimate of 7.35 percent among economists surveyed by Bloomberg.

The Ibovespa has retreated 14 percent from this year’s peak 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 lost 7.1 percent over the same period.

Brazil’s benchmark equity gauge trades at 11.1 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 6.62 billion reais on April 26, which compares with a daily average of 7.67 billion reais this year through April 25, according to data compiled by the exchange.