Ibovespa Rises in Sao Paulo as Commodities Advance Boosts Klabin

The Ibovespa advanced to a one week-high as paper maker Klabin SA followed commodities prices higher amid signs that the global economy is improving.

Gerdau SA, Latin America’s largest steelmaker, gained the most in a year after Goldman Sachs Group Inc. raised its rating to buy. Power utility CPFL Energia SA rose for a third day after its renewable energy unit filed a request with Brazil’s securities regulator to sell shares in an initial public offering.

The Ibovespa rose 0.9 percent to 47,609.46 at the close of trading in Sao Paulo. Fifty-five of the 71 stocks on the index advanced. The real lost 0.6 percent to 2.1989 per dollar. The Standard & Poor’s GSCI index of 24 raw materials advanced 0.8 percent. Separate reports today showed first-time unemployment claims in the U.S. dropped last week and economic confidence in the euro area improved more than economists forecast in June.

“Investors are beginning to pay closer attention to economic data around the world, which have been more positive,” Henrique Kleine, the head analyst at Sao Paulo-based brokerage Magliano SA, said in a telephone interview. “Brazilian equities have been pricing in the worst possible scenario for the world economy and for Brazil.”

Jobless claims in the U.S. decreased by 9,000 to 346,000 in the week ended June 22 from a revised 355,000 the prior period, the Labor Department reported today in Washington. An index of executive and consumer sentiment rose to 91.3 from 89.5 in May, the biggest jump since July 2010, the European Commission in Brussels said today.

Klabin advanced 4.8 percent to 11.13 reais. Gerdau rose 5.7 percent to 12.71 reais.

CPFL, Light

CPFL climbed 2.4 percent to 20.50 reais. Electricity distributor Light SA jumped 5.1 percent to 15.77 reais after Banco Itau BBA SA raised its recommendation to the equivalent of buy.

Some real estate companies and retailers fell today after Brazil’s central bank lowered its forecast for 2013 economic growth while raising inflation estimates. Cyrela Brazil Realty SA Empreendimentos e Participacoes dropped 0.4 percent to 15.54 reais. Cia. Hering declined 0.4 percent to 32.37 reais.

“The worsening of family and business sentiment is partially fueled by price increases in segments with high visibility, such as food, fuel and public tariffs,” the central bank said in its quarterly inflation report. “In the short term, annual inflation still has a tendency to rise and the balance of risks in the prospective outlook is unfavorable.”

Growth Outlook

Policy makers said consumer prices will increase 6 percent this year if the benchmark lending rate remains unchanged at 8 percent, up from a March forecast of 5.7 percent. They also cut the 2013 growth estimate to 2.7 percent, from 3.1 percent.

The Ibovespa slumped into a bear market on June 11 after falling more than 20 percent from this year’s peak on Jan. 3. It has since extended those losses to 25 percent. Brazil’s benchmark equity gauge trades at 11.9 times analysts’ earnings estimates for the next four quarters, compared with 10 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 6.63 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.93 billion reais this year through June 25, according to data compiled by the exchange.

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