Ibovespa Rises for Fifth Day as Commodities Rally Bolsters CSNNey Hayashi
The Ibovespa rose for a fifth day, its longest streak of gains since April, as signs that the global economy is improving boosted Brazilian raw-material producers including steelmaker Cia. Siderurgica Nacional SA.
Pulp maker Suzano Papel & Celulose SA gained after posting a quarterly loss that was less than forecast. Vale SA climbed as iron ore advanced. Rossi Residencial SA led homebuilders lower as Brazilian swap rates increased on concern a weaker real will spur inflation. LLX Logistica SA, Eike Batista’s shipping unit, surged as Abu Dhabi’s sovereign-wealth fund was said to be in talks to buy some of the former billionaire’s assets.
The Ibovespa advanced 0.6 percent to 50,600.55 at the close of trading in Sao Paulo. Forty-eight stocks rose on the measure while 19 fell. The real weakened 1.1 percent to 2.3133 per dollar at 5:27 p.m. local time. The Standard & Poor’s GSCI index of 24 raw materials added 0.4 percent after investor confidence in Germany increased more than forecast in August and U.S. retail sales rose in July.
“To keep going higher, the Ibovespa is depending on good news from abroad, and today we saw some positive economic data in Europe and in the U.S.,” Pedro Galdi, the chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a phone interview.
The Ibovespa earlier dropped as much as 0.5 percent amid speculation that accelerating inflation will encourage policy makers to step up interest-rate increases. The decline in the real is undoubtedly fueling price increases, Carlos Hamilton, the central bank’s economic policy director, said at an event in Belem yesterday. Swap rates on the contract due in January 2015 jumped 16 basis points, or 0.16 percentage point, to 9.88 percent.
Rossi fell 4.4 percent to 2.80 reais.
Suzano climbed 2.7 percent to 8.11 reais. The company posted an adjusted net loss of 247.5 million reais in the second quarter, which compares with an average estimate of a loss of 316.4 million reais, according to data compiled by Bloomberg.
CSN, as Siderurgica Nacional is also known, added 3.3 percent to 7.49 reais. Vale rose 0.9 percent to 31.56 reais.
LLX surged 17 percent to 1.29 reais. Mubadala Development Co., the Abu Dhabi sovereign-wealth fund, is in talks to buy some of Batista’s assets for about $1 billion, two people with direct knowledge of the matter said.
Brazil’s main equity gauge has gained 12 percent from this year’s low on July 3 as higher commodities prices boosted raw-material exporters and oil producer OGX Petroleo & Gas Participacoes SA led a rally by companies owned by Batista. The Ibovespa trades at 13 times analysts’ earnings estimates for the next four quarters, compared with 10.6 for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume of stocks in Sao Paulo was 7.82 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.58 billion reais this year through Aug. 6, according to data compiled by the exchange.