Ibovespa Rises to 16-Week High as PDG Rallies on Rate Outlook

The Ibovespa climbed to the highest level in 16 weeks as PDG Realty SA Empreendimentos & Participacoes led a rally in homebuilders after traders pared bets on Brazilian interest-rate increases.

The BM&FBovespa Real Estate Index climbed to a three-month high, with MRV Engenharia & Participacoes SA rising to its strongest level in one week. Lojas Americanas SA led retailers higher. Iron-ore producer Vale SA, the Ibovespa’s heaviest-weighted stock, declined with commodities, while Eike Batista’s OGX Petroleo & Gas Participacoes SA gained the most on the gauge.

Brazil’s benchmark equity index advanced 0.8 percent to 54,271.25 at the close of trading in Sao Paulo, with 44 stocks higher and 27 lower. The real climbed 1.2 percent to 2.2576 per dollar at 5:31 p.m. local time as the central bank maintained its intervention to strengthen the currency. The Standard & Poor’s GSCI index of 24 raw materials retreated 1.2 percent.

“There are reasons to be more optimistic about consumer stocks, as the outlook for growth in Brazil may be better than we had thought,” Pedro Galdi, the head strategist at brokerage SLW Corretora, said by phone from Sao Paulo.

Real-estate companies gained on reduced speculation that the central bank will sustain the pace of increases in borrowing costs. Swap rates on contracts maturing in January 2015 declined eight basis points, or 0.08 percentage point, to 10.36 percent.

PDG added 4.1 percent to 2.55 reais. MRV advanced 1.8 percent to 9.57 reais. Americanas rose 1.7 percent to 16.85 reais. Vale declined 0.3 percent to 32.98 reais. OGX gained 5.3 percent to 40 centavos.

Ibovespa Volume

Trading volume in Ibovespa stocks was 36 percent lower than the average in the previous 10 days, according to data compiled by Bloomberg. Investors are awaiting the U.S. Federal Reserve’s decision tomorrow on monetary stimulus, Galdi said.

Eneva SA, the energy company formerly known as MPX, jumped 3.8 percent to 5.95 reais after O Estado de S.Paulo reported that Batista may sell his remaining stake. The company said today in a regulatory filing that negotiations are still in a preliminary stage.

The Ibovespa entered a bull market on Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 19 percent in dollar terms this year, compared with a decline of 5 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

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