Ibovespa Rises as Materials Producers Gain on Earnings Outlook

The Ibovespa rose amid speculation that this year’s worst-performing major equity index will rebound as Brazilian commodity exporters report earnings that may have been boosted by a depreciating local currency.

Steelmaker Usinas Siderurgicas de Minas Gerais SA was the biggest gainer on the MSCI Brazil/Materials Index a day before releasing quarterly results. Petroleo Brasileiro SA, the state-controlled oil producer, advanced to a five-week high. Cosmetics maker Natura Cosmeticos SA rallied after second-quarter profit exceeded analysts’ estimates.

The Ibovespa added 1.4 percent to 49,066.75 at the close of trading in Sao Paulo, the highest since June 18. Fifty-seven of the measure’s 71 stocks advanced. The real rose 0.6 percent to 2.2378 per dollar at 5:30 p.m. local time. Commodities producers, accounting for about 38 percent of the benchmark’s weighting, were among the best performers even as the Standard & Poor’s GSCI index of 24 raw materials fell 0.2 percent.

“There’s optimism about exporters’ quarterly earnings that will be released in the coming weeks,” Ricardo Pinto Nogueira, the head of operations at brokerage firm Souza Barros, said by phone from Sao Paulo. Traders are speculating that the real’s 9.4 percent drop against the dollar during the three-month period ended in June boosted revenue, he said.

Five of the nine companies on the Ibovespa that have already reported second-quarter earnings have exceeded analysts’ estimates, according to data compiled by Bloomberg.

“Companies that sell in the international market are expected to show better performance in the second quarter because of the currency,” Felipe Rocha, an analyst at brokerage Omar Camargo, said from Curitiba, Brazil.

Usiminas Results

Usiminas, as Usinas Siderurgicas is also known, gained 2.4 percent to 7.81. The steelmaker will post tomorrow a 1.2 percent increase in sales to 3.26 billion reais in the second quarter from a year earlier, according to the average estimate of seven analysts surveyed by Bloomberg.

Papermaker Fibria Celulose SA declined 1.2 percent to 25.06 reais. Its adjusted net loss of 595.7 million reais in the three months through June was 25 percent lower than expected. The average estimate of eight analysts surveyed by Bloomberg was of an adjusted loss of 797 million reais.

Natura Rally

Natura climbed 3.6 percent to 45.90 reais. The cosmetics maker’s adjusted net income increased 12 percent to 240.2 million reais in the second quarter. That compares with an average estimate of 215.8 million reais from eight analysts surveyed by Bloomberg.

Petrobras, as Petroleo Brasileiro is also known, gained 2.7 percent to 16.84 reais, the highest level since June 20.

Brazil’s main stock gauge has tumbled 20 percent in 2013, the worst performance among the 20 biggest equity benchmarks tracked by Bloomberg. The Ibovespa trades at 12.5 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 6.09 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.7 billion reais this year, according to data compiled by the exchange.

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